Suppose the marginal benefit of writing a contract is $100, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is:

a. MC(L) = 30 + 4L.

b. MC(L) = 40 + 5L.

c. What happens to the optimal contract length when the marginal cost of writing a contract declines?

(Click to select) It decreases. It increases. It stays the same.