Question: Suppose that the total benefit and total cost from an activity are, respectively, given by the following equations: B(Q) = 150 + 28Q 5Q2

Suppose that the total benefit and total cost from an activity are, respectively, given by the following equations: B(Q) = 150 + 28Q – 5Q2 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 Q that maximizes net benefits, what is the value of marginal net benefits?

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a Net benefits are NQ 50 20Q 5Q 2 b Net benefits when Q 1are N1 50 20 5 65 and when Q 5 they ... View full answer

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