Question:
Cost functions of private car use (use of road infrastructure)
Road's average speed of traffic (v, km/h) depends on traffic volume (q, vehicles/h) as follows:
v = 50 - q/100
Average travel cost (c, EUR/h) is a function of average speed v such as
c = 0,5(3 + 200/v)
a) What is the function of total cost C for road use?
b) Derive the marginal cost function
c) What is the average cost c and marginal cost MC at traffic volume q = 500?