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  3. question 2 working with marginal benefits and costs suppose the...

Question: question 2 working with marginal benefits and costs suppose the...

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Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous decisions, Q, ís B(Q) = 200-202 and the total cost from deciding Q is C(O) 4+2Q. The marginal benefit (MB) and marginal cost (MC) is the first order derivative of these functions. MBO) 20-4 and MC(O) 4+40 (1) (4 points, 2 each) What is the total benefit when Q-2? Q-10? (2) (4 points, 2 each) What is the marginal benefit when Q-2? Q-10? (3) (4 points) What level of Q maximizes total benefit? (hint: recall our first order condition for maximization. The first derivative is given as the MB function). 4) (4 points, 2 each) What is total cost when Q-2? Q-10? (5) (4 points, 2 each) What is marginal cost when Q-2? Q-10? (6) (4 points) What level of Q minimizes total cost? (7) (6 points) What level of Q maximizes net benefit - that is Total Benefit- Total Cost?

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