An Airport Is Located Next to a Housing Development

question 24

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 20Y - 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 = 10 and H₂ = 6.
• B)H₁ = 8 and H₂ = 9.
• C)H₁ = 6 and H₂ = 10.
• D)H₁ = H₂ = 6.
• E)H₁ = 9 and H₂ = 13.

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Definitions:

Sales of Merchandise Inventory

Transactions involving the sale of goods held for resale by a business, contributing to its primary revenue.

Recording Process

The steps or procedures involved in documenting financial transactions in the accounting records.

Merchandiser's Net Income

The profit realized by a merchandising company after subtracting all of its operational expenses and cost of goods sold from its total revenue.

Key Components

Essential parts or elements that make up a larger system or process.