Answer the next 6 questions using the following marginal benefit (MB) and marginal cost (MC) functions for activity A: MB 1 200-20A and MC = 500 + 30A and the following total benefit (TB) and total cost (TC) functions: TB = 1 200A-10A² and TC = 500A + 15A² 1 - Undertaking the 10th unit of the activity A 2 - Undertaking the 20th unit of the activity A 3 - The optimal level of activity A* is 14 increases 5- Eliminating the 25th unit of the activity Total Cost by decreases 4 - At the optimal activity level of A*, Net Benefit is equal to 6 - What level of activity maximizes TOTAL Benefit? Net Benefit by 200 Net Benefit by 300 4 Total Benefit by and
Answer the next 6 questions using the following marginal benefit (MB) and marginal cost (MC) functions for activity A: MB 1 200-20A and MC = 500 + 30A and the following total benefit (TB) and total cost (TC) functions: TB = 1 200A-10A² and TC = 500A + 15A² 1 - Undertaking the 10th unit of the activity A 2 - Undertaking the 20th unit of the activity A 3 - The optimal level of activity A* is 14 increases 5- Eliminating the 25th unit of the activity Total Cost by decreases 4 - At the optimal activity level of A*, Net Benefit is equal to 6 - What level of activity maximizes TOTAL Benefit? Net Benefit by 200 Net Benefit by 300 4 Total Benefit by and
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
6
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1: State the information given
VIEWStep 2: 1. Compute net benefit after undertaking 10th unit
VIEWStep 3: 2. Compute Net benefit after undertaking 20th unit
VIEWStep 4: 3. Determine the optimal value of A.
VIEWStep 5: 4. Determine net benefit at 14th unit
VIEWStep 6: 5. Determine the effect of eliminating 25th unit
VIEWStep 7: 6. Determine the level that maximizes total benefit
VIEWSolution
VIEWTrending now
This is a popular solution!
Step by step
Solved in 8 steps with 21 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education