MANAGERIAL ECON.+BUS.STRAT.(LL)>CUSTOM<
9th Edition
ISBN: 9781260443646
Author: Baye
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 3CACQ
To determine
(a)
To write:
The equation of net benefits.
To determine
(b)
To find:
The net benefits when Q is 1 and when Q is 5.
To determine
(c)
To find:
The equation for marginal benefits.
To determine
(d)
To find:
Marginal benefits when Q is 1 and when Q is 5.
To determine
(e)
To find:
The level of Q that maximizes net benefits.
To determine
(f)
To find:
The value of Q that maximizes benefits.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Explain how studying for an exam is subject to the law of diminishing marginal productivity.
The law of diminishing marginal productivity implies that the optimal amount of studying is however many hours will lead to your highest possible score. After this point, your performance falls and you should not study any more.
Assuming you organize your studying reasonably, you will focus on the parts of the text that are most likely to show up on the exam and most likely to raise your grade. As you study less relevant material, your additional time spent studying will yield fewer additional points on the exam. At some point, additional studying can have a negative return.
The law of diminishing marginal productivity pertains to studying in a group only. If you study with one or two people, your grade will likely improve because they can teach you information you don’t know. However, at some point, as you add another person, the grades for everyone decline.
The more and…
You are the manager of a firm that specializes in small single-board widgets.Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions:
Control Variable
(Z)
Total Benefits
B(Z)
Total Cost
C(Z)
Net Benefits
N(Z)
Marginal Benefit
MB(Z)
Marginal Cost
MC(Z)
Marginal Net Benefit
MNB(Z)
0
0
0
1
200
10
2
380
30
3
540
60
4
680
100
5
800
150
6
900
210
7
980
280
8
1040
360
9
1080
450
10
1100
550
A. Graph the total cost and total benefit curves.B. On another graph, plot the points for the marginal cost, marginal benefit, and marginal net benefit.C. Show how the two…
You are the manager of a firm that specializes in small single-board widgets.Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions:
Control Variable
(Z)
Total Benefits
B(Z)
Total Cost
C(Z)
Net Benefits
N(Z)
Marginal Benefit
MB(Z)
Marginal Cost
MC(Z)
Marginal Net Benefit
MNB(Z)
0
0
0
1
200
10
2
380
30
3
540
60
4
680
100
5
800
150
6
900
210
7
980
280
8
1040
360
9
1080
450
10
1100
550
a. How many units (Z) maximize net benefits?b. What is the relationship between marginal benefits and marginal costs at the level of Z you determined above?c. Graph the total…
Chapter 1 Solutions
MANAGERIAL ECON.+BUS.STRAT.(LL)>CUSTOM<
Ch. 1 - Prob. 1CACQCh. 1 - What is the maximum amount you would pay for an...Ch. 1 - Prob. 3CACQCh. 1 - Prob. 4CACQCh. 1 - Prob. 5CACQCh. 1 - Prob. 6CACQCh. 1 - Prob. 7CACQCh. 1 - Prob. 8CACQCh. 1 - Prob. 9CACQCh. 1 - Prob. 10CACQ
Ch. 1 - Prob. 11PAACh. 1 - Prob. 12PAACh. 1 - Prob. 13PAACh. 1 - Prob. 14PAACh. 1 - Prob. 15PAACh. 1 - As a marketing manager for one of the worlds...Ch. 1 - Prob. 17PAACh. 1 - Prob. 18PAACh. 1 - Prob. 19PAACh. 1 - Prob. 20PAACh. 1 - Prob. 21PAACh. 1 - Prob. 22PAACh. 1 - Prob. 23PAACh. 1 - Prob. 24PAA
Knowledge Booster
Similar questions
- Suppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations: B (Q) = 100 + 36Q -4Q and C (Q) = 80 + 12Q a)-What are the marginal net benefits when Q= 1? Q= 5? b)-What level of Q maximizes net benefits? c)-At the value of Qthat maximizes net benefits,what is the value of marginal net benefits?arrow_forwardYou are the manager of a firm that specializes in small single-board widgets. Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions: Control Variable Z Total Benefits B(Z) Total Cost C(Z)0 0 01 200 102 380 303 540 604 680 1005 800 1506 900 2107 980 2808…arrow_forwardPLEASE ANSWER D & E You are the manager of a firm that specializes in small single-board widgets. Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions: Control Variable Z Total Benefits B(Z) Total Cost C(Z)0 0 01 200 102 380 303 540 604 680 1005 800 1506 900 2107 980 2808…arrow_forward
- In the figure above, which of the following statements makes sense? Group of answer choices A) Average fixed cost is B, marginal cost is D, average total cost is C and average variable cost is B. B) Average fixed cost is C, marginal cost is B, average total cost is D and average variable cost is A. C) Average fixed cost is A, marginal cost is B, average total cost is C and average variable cost is D. D)Average fixed cost is D, marginal cost is A, average total cost is B and average variable cost is Carrow_forwardA fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won't buy it because they don& like the taste. From an economic perspective, the company should keep the hamburger on the menu because they spent so much money and time developing and promoting the product. spend more money to develop a more efficient way to cook the hamburger so it cooks in a shorter time. pull the hamburger off the menu and treat the development and promotion expenditures as a sunk cost. keep trying to sell the hamburger so that people who developed and promote it have a job with the company.arrow_forwardA fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won& buy it because they done like the taste. From an economic perspective, the company should.......... keep the hamburger on the menu because they have spent so much money and time developing and promoting the product. spend more money to develop a more efficient way to cook the hamburger so it cooks in a shorter time. pull the hamburger off the menu and treat the development and promotion expenditures as a sunk cost. keep trying to sell the hamburger so that people who developed and promote it have a job with the company.arrow_forward
- Two alternative programs to save 50 more lives per year entail providing more cardiac intensive care facilities and redesigning dangerous highway interchanges. The price of a new cardiac intensive care unit is $500,000, and the price of redesigning and renovating a highway interchange is $1 million. One combination of the two programs that can save 500 lives is five cardiac units and three highway exit renovations. a.) Is the mix involving five cardiac units and three highway exit renovations cost-effective? b.) Assuming that the marginal products of both programs decline, what needs to be done to achieve the cost-effective mix of programs?arrow_forwardAt any quantity, when the marginal benefit equals the marginal cost, that quantity is said to bearrow_forwardSuppose marginal benefits and marginal costs are given by B(Y) = 100 − 16Y and C(Y) = 20Y. What level of Y will yield the maximum net benefits?arrow_forward
- Alec and Ellie are the only detectives in the town of Broadchurch. They work together. Assume efficient production. Each has 10 hours in a day to allocate between conducting interviews and completing paperwork. In two hours Alec can produce 5 interviews or 19 files of paperwork. In two hours, Ellie can produce 13 interviews or 22 files of paperwork. What is Ellie's Opportunity Cost of an interview in terms of files of paperwork? Enter a number only. Note: The question here is asking you for the opp. cost in terms of files so you can just enter a number. On the assessments if the question is phrased as "what is the opportunity cost?", you will have to enter the units as well, without which you will not get full credit.arrow_forwardWhen thinking about cost analysis in Microeconomics, what are the real-world problems that occur when applying theories of scale? Describe and give an example of each.arrow_forwardSuppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations: B (Q) = 100 + 36Q -4Q and C (Q) = 80 + 12Q Write out the equationfor the net benefits. What are the net benefits when Q= 1? Q= 5? Write out the equation for the marginal net benefits. What are the marginal net benefits when Q= 1? Q= 5? What level of Q maximizes net benefits? At the value of Qthat maximizes net benefits,what is the value of marginal net benefits?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning