An Airport Is Located Next to a Housing Development

question 10

Multiple Choice

An airport is located next to a housing development. Where X is the number of planes that land per day and Y is the number of houses in the housing development, profits of the airport are 22X - X² and profits of the developer are 32Y - Y² - XY. Let H₁ be the number of houses built if a single profit-maximizing company owns the airport and the housing development. Let H₂ be the number of houses built if the airport and the housing development are operated independently and the airport has to pay the developer the total "damages" XY done by the planes to the developer's profits.

• A) H₁ = 16 and H₂ = 15.
• B) H₁ = 14 and H₂ = 16.
• C) H₁ = 16 and H₂ = 14.
• D) H₁ = H₂ = 14.
• E) H₁ = 15 and H₂ = 19.

---

Definitions:

Component Parts

Individual pieces or elements that, when combined, form a complete product or system.

Specialty Products

Specialty products are goods and services that are perceived as unique or high-value by consumers, often characterized by significant brand loyalty and a higher purchasing effort.

Shopping Products

Goods that consumers purchase after comparing quality, price, and style from various sellers, spending considerable time and effort to make the best decision.

Business Products

Goods or services that are sold to other businesses for further production, use in operations, or resale.