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Suppose the total benefit derived from a continuous decision, Q, is B(Q) = 20Q - 2Q 2 and corresponding total cost is C(Q) = 4 + 2Q 2 so that MB(Q) =...
Suppose the total benefit derived from a continuous decision, Q, is B(Q) = 20Q - 2Q2 and 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 level of Q minimizes total cost?
f. What level of Q maximizes net benefits?