Suppose the total benefit and total cost from a continuous activity are, respectively, given by the following
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Question:
Suppose the total benefit and total cost from a continuous activity are, respectively, given by the following equations.
B(Q)=100+36Q-4Q2 and C(Q) =80+12Q
(Note: MB(Q)=36-8Q and MC(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 when Q=1? Q=5?
Net Benefits when Q=1: ________
Net Benefits when Q=5: ________
Write out the equation for the marginal net benefits.
MNB (Q) = _______+________ Q
c. What are the marginal net benifiets when Q=1? Q=5?
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