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Find the optimal contract length

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Reference no: EM132316810

Suppose the marginal benefit of writing a contract is $50, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is:

Instruction: Enter your responses rounded to two decimal places.

a. MC(L) = 25 + 4L.

b. MC(L) = 45 + 2L.

Reference no: EM132316810

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