Item

5

10

points

eBook

Print

References

Check my work

Check My Work button is now enabled

Item5

Problem 01-09

Suppose the total benefit derived from a given decision,Q, is B(Q) = 20Q- 2Q²and the corresponding total cost is C(Q) = 4 + 2Q², so that MB(Q) = 20 - 4Qand MC(Q) = 4Q.

Instruction:Use a negative sign (-) where appropriate.

a. What is total benefit whenQ= 2?Q= 10?

When Q = 2:

When Q = 10:

b. What is marginal benefit whenQ= 2?Q= 10?

When Q = 2:

When Q = 10:

c. What level ofQmaximizes total benefit?

d. What is total cost whenQ= 2?Q= 10?

When Q = 2:

When Q = 10:

e. What is marginal cost whenQ= 2?Q= 10?

When Q = 2:

When Q = 10:

f. What level ofQminimizes total cost?

g. What level ofQmaximizes net benefits?