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What level of q maximizes net benefits

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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 – 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?

Reference no: EM13314686

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