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Suppose the total benefit derived from a continuous decision, Q, is B(Q) = 20Q – 2Q2 and corresponding total cost is C(Q) = 4 + 2Q2 so that MB(Q) = 20 – 4Q and MC(Q) = 4Q.
What is total benefit when Q = 2? Q = 10?
What is marginal benefit when Q = 2? Q = 10?
What level of Q maximizes total benefit?
What is total cost when Q = 2? Q = 10?
What level of Q minimizes total cost?
What level of Q maximizes net benefits?
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