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Question: andnbspsuppose the hookturnistanian government is considering how much to invest...

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Suppose the Hookturnistanian Government is considering how much to invest in expanding public transport to reduce traffic congestion. An expert committee has advised the government that the total benefits TB, and the total costs TC, of attracting more public transport passengers (which we express in millions of passengers and denote by N) are given by


TB = 100N – N2, and

TC = 4 + 40N + 2N2.

 

1: Derive expressions for the marginal benefits and marginal costs.

2: What is the number of new passengers, N*, that maximises net benefits?

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