Suppose that Siemens produces the Velaro high-speed train for a constant marginal
cost of £200. Siemens has fi?xed costs of £736. Siemens faces the inverse demand function P (x) = 600 ???? 25x.
What quantity x of trains will Siemens produce if it follows the inverse elasticity
rule? What would its profi?t be?
Thanks for any help!
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