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Cost Analysis

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For the cost function C(Q) = 2000 + 15Q + 5Q2 + 4Q3, what is the marginal cost of producing the fifth unit of output?

A) $2,000.
B) $256.
C) $340.
D) $365.

Suppose total benefits and total costs are given by B(Y) = 50Y - 4Y2 and C(Y) = 6Y2. What level of Y will yield the maximum net benefits?

A) 2.5
B) 5.0
C) 50/18
D) 50/8

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Solution Summary

There are two problems. Solution to first problem describes the steps to calculate marginal cost of producing a given unit of output. Solution to second problem calculates value Y that maximizes the net benefits.

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1. For the cost function C(Q) = 2000 + 15Q + 5Q2 + 4Q3, what is the marginal cost of producing the fifth unit of output? ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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