You are the manager of a firm that specializes in small single-board widgets. Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions: Control Variable (Z) Total Benefits B(Z) Total Cost C(Z) Net Benefits N(Z) Marginal Benefit MB(Z) Marginal Cost MC(Z) Marginal Net Benefit MNB(Z) 0 0 0 1 200 10 2 380 30 3 540 60 4 680 100 5 800 150 6 900 210 7 980 280 8 1040 360 9 1080 450 10 1100 550 A. Graph the total cost and total benefit curves. B. On another graph, plot the points for the marginal cost, marginal benefit, and marginal net benefit. C. Show how the two graphs relate to each other.
You are the manager of a firm that specializes in small single-board widgets.
Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions:
|
Control Variable (Z) |
Total Benefits B(Z) |
Total Cost C(Z) |
Net Benefits N(Z) |
Marginal Benefit MB(Z) |
Marginal Cost MC(Z) |
Marginal Net Benefit MNB(Z) |
| 0 |
0 |
0 | ||||
| 1 | 200 | 10 | ||||
| 2 | 380 | 30 | ||||
| 3 | 540 | 60 | ||||
| 4 | 680 | 100 | ||||
| 5 | 800 | 150 | ||||
| 6 | 900 | 210 | ||||
| 7 | 980 | 280 | ||||
| 8 | 1040 | 360 | ||||
| 9 | 1080 | 450 | ||||
| 10 | 1100 | 550 |
A. Graph the total cost and total benefit curves.
B. On another graph, plot the points for the marginal cost, marginal benefit, and marginal net benefit.
C. Show how the two graphs relate to each other.
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