2. (25 points) Assume that the total benefit from a continuous decision, involving a control variable Q,
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2. (25 points)
Assume that the total benefit from a continuous decision, involving a control variable Q, is TB(Q) = 25Q - 2.5Q2 and the associated total cost is TC(Q) = 3 + 2Q2.
(a)Provide a mathematical justification that net benefits are maximized at your determined level of the control variable Q in (b) above.
(b)Determine the level of control variable Q that maximizes total benefit. Clearly show your steps and calculations.
(c)Estimate the total fixed cost and total variable cost when the control variable Q is 3. Clearly show your steps and calculations.
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