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Suppose the total benefit derived from a given decision, Q, is B(Q) = 25Q - Q2 and the corresponding total cost is C(Q) = 5
Suppose the total benefit derived from a given decision, Q, is B(Q) = 25Q - Q2 and the corresponding total cost is C(Q) = 5 + Q2, so that MB(Q) = 25 - 2Q and MC(Q) = 2Q.
a. What is total benefit when Q = 2? Q = 10?
b. What is marginal benefit when Q = 2? Q = 10?
c. What level of Q maximizes total benefit?
d. What is total cost when Q = 2? Q =10?
e. What is marginal cost when Q = 2? Q = 10?
f. What level of Q minimizes total cost?
g. What level of Q maximizes net benefits
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