Problem
A railroad has two types of services: freight service and passenger service. The stand-alone cost for freight service is TC1 = 500 + Q1, where Q1equals the number of ton-miles of freight hauled each day and TC1 is the total cost in thousands of dollars per day. The standalone cost for passenger service is TC2 = 1000 + 2Q2, where Q2 equals the number of passenger-miles per day and TC2 is the total cost in thousands of dollars per day. When a railroad offers both services jointly, its total is TC(Q1, Q2) = 2000 + Q1 +2Q2. Does the provision of passenger and freight service exhibit economies of scope?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.