Problem 06-09 (algo) 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 _ Is: Instruction: Enter your responses rounded to two decimal places. a. MC(L) = 25 + 4L. b. MCIL) = 45 + 2L. c. What happens to the optimal contract length when the marginal cost of writing a contract declines? [Click to selec vProblem 06-10 (algo) Suppose the marginal cost of writing a contract of length { Is MC(L) = 20 + 54. Find the optimal contract length when the marginal benefit of writing a contract Is: Instruction: Enter your responses rounded to two decimal places. a. MB(L) = 90. b. MB(L) = 140. c. What happens to the optimal contract length when the marginal benefit of writing a contract Increases? It Increases. It stays the same. O It decreases.Problem 06-27 (algo) Recently, the owner of a Trader Joe's franchise decided to change how she compensated her top manager. Last year, she paid him a fixed salary of $60,000 and her store made $135,000 in profits (not counting payment to her top manager). She suspected the store could do much better and feared the fixed salary was causing her top manager to shirk on the Job. Therefore, this year she decided to offer him a fixed salary of $30,000 plus 18% of the store's profits. Since the change, the store is performing much better, and she forecasts profits this year to be $275,000 (again, not counting the payment to her top manager). Assuming the change In compensation is the reason for the Increased profits, and that the forecast is accurate, how much more money will the owner make (net of payment to her top manager) because of this change? S Does the manager make more money under the new payment scheme? [ Click to selec v