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(1) Control Variable Q (2) Total Benefits TB(Q) (3) Total Cost TC(Q) (4) Net Benefits, NB(Q) (5) Marginal Benefits, MB(Q) (6) Marginal Cost, MC(Q) (7)

(1)

Control Variable

Q

(2)

Total Benefits

TB(Q)

(3)

Total Cost TC(Q)

(4)

Net Benefits, NB(Q)

(5)

Marginal Benefits, MB(Q)

(6)

Marginal Cost, MC(Q)

(7)

Marginal Net Benefits, MNB(Q)

100 1100.0 800.0 -- -- --
101 880.0 230.0
103 1080.0 200.0
106 1440.0 170.0
110 1960.0 155.0
115 2635.0 147.5
120 4035.0 140.0

  1. What is the economic goal of this process? With Table in (a), determine the economically optimal level of the control variable Q. Explain.

  1. State the economic condition for a manager's optimal level of the control variable Q. With data from your Table in (a), provide a graphical illustration and a brief explanation supporting your stated economic condition for the optimal level of Q.

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