A case Study on the Nordic Bridge Assignment

A CASE STUDY ON THE NORDIC BRIDGE
BUSINESS ECONOMICS

Perfectly Competitive Demand Curve
• There are 2 producers of the bridge, that is,
Denmark and Sweden
• There are large numbers of travelers between
these two countries
• The bridge has other substitutes in market,
which are, rails and ferry
• Each constructor and traveler has perfect
knowledge related to the market
• The price, charged by the bridge, has
determined by the market supply and market
demand

Individual Demand Curve
• Individual demand curve has
a horizontally straight line
• The curve is represented by
the average revenue and
marginal revenue curve
• Denmark and Sweden
individually has experienced
this horizontally straight
demand curve
• Each country acts as the price
taker and cannot influence
the market price individually
as they have possessed small
portion of the entire market
Price
O Output
AR=MR=D
Figure1: Individual demand curve

Downward slopping demand
• Individual demand curve, faced by each
country, can be shown as horizontally
straight line
• Market demand curve of this bridge can be
represented as downward sloping line
• Demand for the bridge has a negative
relation with price
• Travelers can use rail or ferry due to higher
prices of the bridge
•