9. Suppose the marginal benefit of writing a contract is $50, independent of its length. Find the...

Question:

9. Suppose the marginal benefit of writing a contract is $50, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is:

a. MC(L)  10  2L.

b. MC(L)  5  2L.

c. What happens to the optimal contract length when the marginal cost of writing a contract declines?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: