Question
Your firm's research department has estimated your total revenues to be TR= 5,000*Q 10*Q2 and your total costs to be TC = 500 +
Your firm's research department has estimated your total revenues to be TR= 5,000*Q – 10*Q2 and your total costs to be TC = 500 + 2.5*Q2. (Note that MB = 5,000 – 20*Q and MC = 5*Q.)
a. What level of Q maximizes net benefits?
b. What is marginal benefit at this level of Q?
c. What is marginal cost at this level of Q?
d. What is the maximum level of net benefits (profits)?
Step by Step Solution
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Step: 1
a Thus Net benefit Profits are maximized ...
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Step: 2
Step: 3
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Financial Accounting
Authors: Walter Harrison, Charles Horngren, William Thomas
10th edition
133796833, 133427536, 9780133796834, 978-0133427530
