Higher unemployment caused by the recession and higher gasoline prices have contributed to a substantial reduction during
Question:
a. Is MTA a monopolist in New York City? Do you think MTA possesses a high degree of market power? Why or why not?
b. If the marginal cost of letting another vehicle cross a bridge or travel through a tunnel is nearly zero, how should the MTA set tolls in order to maximize profit? In order to maximize toll revenue? How are these two objectives related?
c. With the decrease in demand for bridge and tunnel crossings, what is the optimal way to adjust tolls: raise tolls, lower tolls, or leave tolls unchanged? Explain care-fully?
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Managerial Economics Foundations of Business Analysis and Strategy
ISBN: 978-0078021718
11th edition
Authors: Christopher Thomas, S. Charles Maurice
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