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Net benefit maximization

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Please refer attached file for better clarity of tables.

Complete the following table and answer the accompanying questions.
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 level
of the control variable?

Q B(Q) C(Q) N(Q) M(Q) MC(Q) MNB(Q)
100 1200 1000 210 90
101 1400 100
102 1590 110
103 1770 120
104 1940 130
105 2100 140
106 2250 150
107 2390 160
108 2520 170
109 2640 180
110 2750 190

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Solution Summary

Solution determines the level of control variable at which net benefits are maximized.

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Please refer attached file for better clarity of tables.

Q B(Q) C(Q)* N(Q) M(Q)** MC(Q) MNB(Q)
100 1200 1000 200 210 90 120
101 1400 1100 300 200 100 100
102 1590 1210 380 190 110 80
103 1770 1330 440 180 120 60
104 1940 1460 480 170 ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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