II. The Troll Road Company is considering building a toll road. It estimates that its linear demand curve is as shown below. Assume that the fixed cost of the road is $0.5 million per year. Maintenance costs, which are the only other costs of the road, are also given in the table.
1. Using the midpoint convention, compute the profit-maximizing level of output.
2. Using the midpoint convention, what price will the company charge?
3. What is marginal revenue at the profit-maximizing output level? How does marginal revenue compare to price?