Marginal cost & benefit
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1-The only choice variable is x. The total benefit function is B(x) = 100x - 2x2, and the total cost function is C(x) = 1/3 x3 - 6x2 + 52x + 80.
a-What are the marginal benefit and marginal cost functions?
b-Set up the net benefit function and then determine the level of x that maximizes net benefit. (Use the positive value of x.)
c-What is the maximum level of net benefit?
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Solution Summary
From expressions, marginal cost and benefits are estimated and then maximum benefit is estimated.
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a.
B(x) = 100x - 2x^2
Marginal benefit = dB/dx = 100 - 4x
C(x) = 1/3 x^3 - 6x^2 + 52x + 80
Marginal cost = dC/dx = ...
Education
- BEng, Allahabad University, India
- MSc , Pune University, India
- PhD (IP), Pune University, India
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