1.Suppose the marginal costs (MC) of reading are constant & the marginal benefits (MB) of reading decline (over time). Initially, the MB of Reading are greater than the MC. Draw the MB curve and MC curve of studying, & identify the efficient amount of reading. Then explain why the efficient point is the point at which the net benefits of reading are maximized. ________________________________________________ 2. Using the diagram you drew in question 1, lower the marginal costs of reading and identify the new efficient amount of reading. Also, identify the additional net benefits derived as a result of the lower marginal cost of reading.
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1.Suppose the marginal costs (MC) of reading are constant & the marginal benefits (MB) of reading decline (over time). Initially, the MB of Reading are greater than the MC. Draw the MB curve and MC curve of studying, & identify the efficient amount of reading. Then explain why the efficient point is the point at which the net benefits of reading are maximized. ________________________________________________
2. Using the diagram you drew in question 1, lower the marginal costs of reading and identify the new efficient amount of reading. Also, identify the additional net benefits derived as a result of the lower marginal cost of reading.
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