Suppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations: B(Q) = 50 + 18Q – 2Q2 and C(Q) =40 + 6Q. What level of Q maximizes net benefits? (b) The demand curve for product X is given by Qxd = 200 – 4Px. How much consumer surplus do consumers receive when Px = $40? Explain (using graph). (c) Suppose demand and supply are given by Qd = 30 – P and Qs = P – 10. What are the equilibrium quantity and price in this mark

Suppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations: B(Q) = 50 + 18Q – 2Q2 and C(Q) =40 + 6Q. What level of Q maximizes net benefits? (b) The demand curve for product X is given by Qxd = 200 – 4Px. How much consumer surplus do consumers receive when Px = $40? Explain (using graph). (c) Suppose demand and supply are given by Qd = 30 – P and Qs = P – 10. What are the equilibrium quantity and price in this mark

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter8: Understanding Markets And Industry Changes

Section: Chapter Questions

Problem 5MC

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Your firm's research department has estimated your total revenues to be R(Q) = 30,000Q - 80Q^2 and your total costs to be C(Q) = 1,000 + 20Q^2 (a) What level of Q maximizes net benefits? (Note that the marginal functions are MR(Q) = 30,000 - 160Q and MC(Q) = 40Q) (b) what is the marginal benefit for the level of Q you computed? (c) what is the maximum level of net benefits?
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