The Port of Oakland is one of the largest container shipping ports on the west coast. 200,000 TEU (Twenty-foot Equivalent Unit) containers move through the port each month. Imports arrive at the port on massive cargo ships which are then ofoaded onto trucks for delivery across the western U.S. These trucks are leased at a cost of $15,000 each per month. Although each truck requires at least one driver when underway, drivers are only part of the human effort required. Inventory tracking, scheduling, accounting, and logistics all require skilled people. The more effort that is applied to these critical functions, the fewer trucks are needed. Average labor cost is $9,000 per person per month. Freight capacity can be determined from the production function: Q = 14-1.7T0'5L0'6 where Q is the number of TEU containers moved per month, T is the number of trucks leased, and L is the number of people employed. a. The port will lease trucks and employ people. Cost per TEU per month will be S An alternative to trucks is shipping by railroad. Suppose the Trans-Pacic Railroad Com pany submits a proposal to the Port of Oakland to handle some of its freight at a price equal to the Port's current cost (per TEU) to ship by truck. TransPacic's total cost to ship is TC(R) = 13,400 + 4R + 0.0004R2 where R is the number of TEU's moved by railroad per month. b. To maximize prot, Trans-Pacic will propose to ship TEUs per month at Oakland's current cost. Instead, suppose that the railroad proposes to ship 100,000 TEUs per month (again, at the same cost per TEU as in parts a. and b.) to ship half of the 200,000 TEU containers that move through the port each month. c. The Port of Oakland [WILL I WILL NOT circle one] accept the railroad proposal because Note: recall that (X 3' )1/3' = X