Complete the accompanying table and answer the accompanying questions. (L01, LO6, LO7) a. At what level of the control variable are net benefits maximized? b. What is the relation between marginal benefit and marginal cost at this levelof the variable? Control Variable Q Total Benefits B(Q) Total Cost C(Q) Net Benefits N(Q) Marginal Benefit MB(Q) Marginal Cost MC(Q) Marginal Cost MC(Q) 100 1200 950       60 101 1400         70 102 1590         80 103 1770         90 104 1940         100 105 2100         110 106 2250

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Complete the accompanying table and answer the accompanying questions. (L01, LO6, LO7)

a. At what level of the control variable are net benefits maximized?

b. What is the relation between marginal benefit and marginal cost at this levelof the variable?

Control Variable Q Total Benefits B(Q) Total Cost C(Q) Net Benefits N(Q) Marginal Benefit MB(Q) Marginal Cost MC(Q) Marginal Cost MC(Q)
100 1200 950       60
101 1400         70
102 1590         80
103 1770         90
104 1940         100
105 2100         110
106 2250         120
107 2390         130
108 2520         140
109 2640         150
110 2750         160

 

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Step 1

Net Benefit Maximization:

A firm will typically produce where its NB are maximized, or in other words, where the difference between the NB and net costs is at its highest positive value. We can calculate the optimization point by examining the firm's MB and MC. 

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