Assume that total benefit from a continuousdecision, involving a control variable Q, is: TB =25Q – 2.5Q² and the associated total cost is: TC(Q)= 5 + 4Q2.%3DWith the total benefit and total cost functions(equations) given above:Estimate the value of total benefit when thecontrol variable Q is 3. Clearly show your stepsand calculations.Estimate the marginal benefit when the controlvariable Q is 3. Clearly show your steps andcalculations.Determine the level of control variable Q thatmaximizes total benefit. Clearly show your stepsand calculations.Provide a justification that total benefit ismaximized at your determined level of controlvariable Q in (c) above.Estimate the level of control variable Q thatmaximizes net benefits. Clearly show your stepsand calculations.

Here, we calculate the given as follow;

\ssume that total benefit from a continuous lecision, involving a control variable Q, is: TB 5Q – 2.5Q2 and the associated total cost is: T = 5 + 4Q2. Vith the total benefit and total cost functions

\ssume that total benefit from a continuous lecision, involving a control variable Q, is: TB 5Q – 2.5Q2 and the associated total cost is: T = 5 + 4Q2. Vith the total benefit and total cost functions

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Assume that total benefit from a continuous
decision, involving a control variable Q, is: TB =
25Q – 2.5Q² and the associated total cost is: TC(Q)
= 5 + 4Q2.
%3D
With the total benefit and total cost functions
(equations) given above:
Estimate the value of total benefit when the
control variable Q is 3. Clearly show your steps
and calculations.
Estimate the marginal benefit when the control
variable Q is 3. Clearly show your steps and
calculations.
Determine the level of control variable Q that
maximizes total benefit. Clearly show your steps
and calculations.
Provide a justification that total benefit is
maximized at your determined level of control
variable Q in (c) above.
Estimate the level of control variable Q that
maximizes net benefits. Clearly show your steps
and calculations.

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