contestada

If the marginal cost for the state of Montana to increase the speed limit on its interstate highways to 100 mph is estimated to be $500 per day, then Montana should increase the speed limit to 100 mph___________.

Respuesta :

Answer:

if the marginal gain on implementing the speed limit is equal to or greater than $500 per day.

Explanation:

Governments and businesses always balance the cost-to-benefit ratio when undertaking a project.

The point at which the benefit is equal to the cost is called break-even point.

When the benefit is above the break-even point the entity is making profit.

For speed limit implementation to be sustainable and not cause losses, Montana should ensure benefits are above $500 per day.