Suppose the marginal cost of writing a contract of length L is MC(L) = 10 + 2L.
Question:
a. MB(L) = 100.
b. MB(L) = 150.
c. What happens to the optimal contract length when the marginal benefit of writing a contract increases?
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a When the MB 100 the optimal contract length is 45 b Wh...View the full answer
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Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
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