Suppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations:

B(Q) = 100 + 36Q 4Q²and C(Q) =80 + 12Q.

(Note:MB(Q) = 36 8QandMC(Q) = 12.)

Instructions:Use a negative sign () where appropriate.

a. Write out the equation for the net benefits.

N(Q) =+Q+Q²

b. What are the net benefits whenQ= 1?Q= 5?

Net benefits whenQ= 1:

Net benefits whenQ= 5:

c. Write out the equation for the marginal net benefits.

MNB(Q) =+Q

d. What are the marginal net benefits whenQ= 1?Q= 5?

Marginal net benefits whenQ= 1:

Marginal net benefits whenQ= 5:

e. What level ofQmaximizes net benefits?

f. At the value ofQthat maximizes net benefits, what is the value of marginal net benefits?