Question: Please help Question 2. [14 points.] Elon Musk is planning a new business venture: moon tourism. Musk believes that after a $1.5 billion dollar initial
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Question 2. [14 points.] Elon Musk is planning a new business venture: moon tourism. Musk believes that after a $1.5 billion dollar initial investment in tech- nology, he will have a rocket and capsule system that can fly any number of people to the moon and back for a marginal cost of $10 million per person. The demand for moon travel is given by Q - 800- 40P, where Qq represents the number of people flown to the moon (and back!), and P is measured as millions of dollars per person. (a) [7 points.] Is there any price P such that the moon travel business will be profitable for Elon Musk (including the initial investment cost)? (b) [7 points.] Is there any price P such that the moon travel business would create positive total surplus (consumer plus producer surplus, minus the initial investment cost)
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