Use the following information for questions 3-6. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 1 2 3 Total Railroad Profit $100 $200 $300 Total Lost Profit for Farmer $40 $130 $250 If a court grants the Railroad the property right to run as many trains as it wishes, and transaction costs are $80 (split evenly by the Railroad and the Farmer), how many trains will run? A. 0 B. 1 C. 2 D. 3

Use the following information for questions 3-6. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 1 2 3 Total Railroad Profit $100 $200 $300 Total Lost Profit for Farmer $40 $130 $250 If a court grants the Railroad the property right to run as many trains as it wishes, and transaction costs are $80 (split evenly by the Railroad and the Farmer), how many trains will run? A. 0 B. 1 C. 2 D. 3

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 2.1IP

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