題組內容

二. Problems and Short-essay Questions
Please answer the following questions IN SEQUENCE. All questions may be answered in either Chinese or English.
1. Suppose there is a railway that runs coal-burning steam locomotives through a farming area and caused fires in the crop felds at harvest time. The crop damage from each train run is $200. To run trains, the railway company incurs a private marginal cost of $100n, where n denotes the number of train runs. For simplicity, assume there are no fixed costs. The revenue from a train run is $400.

(D) (6 points) Now assume the railway company is legally lable for the damage caused. That is, it is required to pay the farmer s200 for each train run. How many trains would the company run? How much proft does it make?