Task 3 (10 marks) (a) If you are the owner of a small transport company and wish to purchase a truck. The seller offers you three options: 1. pay $300,000 now and nothing more 2. pay $150,000 now and $180,000 in five years 3. pay nothing now and $340,000 in five years If the interest rate is 5%, which option will you choose? Assuming that the current cost of the purchasing the truck is constant over time, what is the fixed cost per month of keeping the truck for five years if you spread it out evenly over the five years? If the company wishes to mark-up the price by 20%, what price should it charge for using the truck? (b) An airline company provides both freight and passenger services between two cities. Freight demand (Q f ) and passenger demand (Qp ) are as follows: Qf = 1500 - P f Qp = 1200 - P p The marginal cost of providing a trip is given by MC f = MC p = MC = 10 + Q f + 2Qp . What are the optimal fares for both means of transportation?