(Solution) - A railroad has two types of services freight service and -(2025 Original AI-Free Solution)

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A railroad has two types of services: freight service and passenger service. The stand-alone cost for freight service is TC1 = 500 + Q1, where Q1 equals the number of ton-miles of freight hauled each day and TC1 is the total cost in thousands of dollars per day. The stand-alone cost for passenger service is TC2 = 1000 + 2Q2, where Q2 equals the number of passenger-miles per day and TC2 is the total cost in thousands of dollars per day. When a railroad offers both services jointly its total is TC(Q1, Q2) = 2000 Q1 + 2Q2. Do the provision of passenger and freight service exhibit economies of scope?