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Suppose that the total benefit and total cost from an activity are, respectively, given by the following equations: B(Q)=150+28Q-5Q(squared) and C(Q)=100+8Q. (Note:MB(Q)=28-10Q and MC(Q)=8.)
a. write out the equation for 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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