Question: suppose that ralf enjoys collecting morel mushrooms from the forest...
Suppose that Ralf enjoys collecting morel mushrooms from the forest. The marginal benefit that he receives (in dollar terms) from each additional mushroom can be represented by the function MB = 42 – 4m (where m represents the quantity of mushrooms). Ralf’s marginal cost of collecting mushrooms is given (in dollar terms) by the function MC = 2m.
- How many morel mushrooms will Ralf optimally collect? In other words, what quantity of mushrooms maximizes Ralf's net benefits? Show your work
- Illustrate the MB and MC functions graphically, labelling all axes and lines. On a separate graph, illustrate Ralf’s total benefit and total cost of collecting mushrooms. On a third graph illustrate Ralf’s net benefits. On each graph, clearly show the optimal quantity