A government is applying a cost–benefit analysis to infrastructure projects. It is thinking about constructing a new railway that would connect a city centre with its airport. It has estimated the following. private costs $ billion 1.0; social costs 1.7; private benefits 0.5; external benefits 1.8. What decision should the government make, and why?
- Ado not proceed; total costs exceed external benefits
- Bdo not proceed; total costs exceed total benefits
- Cproceed; private costs exceed private benefits
- Dproceed; social benefits exceed social costs