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A growing metropolis has authorized the expansion of commuter trains to a broader region around the city. The city government conducted a competitive bidding process

A growing metropolis has authorized the expansion of commuter trains to a broader region around the city. The city government conducted a competitive bidding process and has awarded the contract for the new train lines to Acme train company. Acme's profits for this venture are represented by =722 , where represents the number of new train lines established. The new train lines will run adjacent to land owned by a developer, who plans to build new housing on the land. Consumers generally do not want to live adjacent to noisy train tracks, so the developer's profits are impacted by the train lines. The profits for the developer are =602 , where is the number of houses she builds. Another way to efficiently account for externalities is through side payments. Imagine that the developer could pay the train company to limit the number of trains it runs. Specifically, the developer will compensate the train company for exactly the profit it loses for each train it does not run. How many train lines will run? How many houses will be built? What are the total profits for the developer? $ What are the profits for the train company

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