Based on the principle of economies of scale, we would expect Port Mann Bridge to have a lower long-run average cost compared to Lions Gate Bridge. The correct answer is: a) economies of scale; lower.
Economies of scale refers to the cost advantage a company gets by increasing production. As output increases, the fixed costs (like construction) get spread over more units, lowering the average cost per unit.
In this case, Port Mann Bridge has more lanes (higher output) than Lions Gate Bridge, which means it can potentially handle more traffic and generate more revenue. This allows it to spread its fixed costs (like construction and maintenance) over a larger number of users, leading to lower average costs in the long run.
Here's a breakdown of the other options:
b) economies of scale; higher: This is incorrect because economies of scale lead to lower average costs, not higher.
c) None of the answers offered are correct: This is not true as the question clearly asks about the relationship between bridge capacity and long-run average cost, and economies of scale is the relevant concept here.
d) constant returns to scale; equal: Constant returns to scale means the average cost stays the same as output increases. While this might be true in some specific scenarios, it's not the most likely outcome in the context of bridge construction and operation.
e) diseconomies of scale; lower: Diseconomies of scale occur when increasing production leads to higher average costs. This is less likely to be the case with bridges as they have inherent capacity limitations and can often benefit from economies of scale.