Question

Suppose the total benefit derived from a continuous decision, Q, is B(Q) = 20Q – 2Q2 and the corresponding total cost is C(Q) = 4 + 2Q2, so that MB(Q) = 20 – 4Q and MC(Q) = 4Q.
a. What is total benefit when Q = 2? Q = 10?
b. What is marginal benefit when Q = 2? Q = 10?
c. What level of Q maximizes total benefit?
d. What is total cost when Q = 2? Q = 10?
e. What is marginal cost when Q = 2? Q = 10?
f. What level of Q minimizes total cost?
g. What level of Q maximizes net benefits?



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  • CreatedApril 18, 2014
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