In 1996, the X Prize Foundation created what became known as the Ansari X Prize—a $10 million prize for the first nongovernment group to send a reusable manned spacecraft into space twice within two weeks. In 2004, it was won by the Tier One project, financed by Microsoft cofounder Paul Allen.

a. An answer you can find on the Internet: How high did SpaceShipOne fly when it won the Ansari X Prize?

b. How much did it cost to develop SpaceShipOne? Was the $10 million prize enough to cover the costs? Why do you think Microsoft cofounder Paul Allen invested so much money to win the prize? Do Allen’s motivations show up in our monopoly model?