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uppose that the total benefit and total cost from an activity are, respectively, given by the following equations: B ( Q ) =150 + 28Q

uppose that the total benefit and total cost from an activity are, respectively, given by the

following equations: B

(

Q

)

=150 + 28Q - 5Q and C(Q) = 100 + 8Q. (Note:

MB(Q) = 28 - 10Q and MC(Q)

=

8.)

a.

Write out the equation for the net benefits.

b.

What are the net benefits when

Q = 1? Q = 5

c.

Write out the equation for the marginal net benefits.

d.

What are the marginal net benefits when

Q = 1? Q = 5

?

e.

What level of Q maximizes net benefits?

f.

At the value of that maximizes net benefits, what is the value of marginal net benefits?

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