ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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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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Transcribed Image Text: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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