9. Suppose the total benefit derived from a given decision, Q, is B(Q) = 25Q-Q and the corresponding total cost is C(Q) = 5 + Q², so that MB(Q) = 25-20 and MC(Q) = 2Q. 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?

9. Suppose the total benefit derived from a given decision, Q, is B(Q) = 25Q-Q and the corresponding total cost is C(Q) = 5 + Q², so that MB(Q) = 25-20 and MC(Q) = 2Q. 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?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter3: Benefits, Costs, And Decisions

Section: Chapter Questions

Problem 3.4IP

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