suppose a firms benefit and cost structure is given by the following respectivel
ID: 1168478 • Letter: S
Question
suppose a firms benefit and cost structure is given by the following respectively B(q) = 400Q-5Q^2 C(q) = 3Q^2 what is the output level at which net benefits are maximized? suppose a firms benefit and cost structure is given by the following respectively B(q) = 400Q-5Q^2 C(q) = 3Q^2 what is the output level at which net benefits are maximized? suppose a firms benefit and cost structure is given by the following respectively B(q) = 400Q-5Q^2 C(q) = 3Q^2 what is the output level at which net benefits are maximized?Explanation / Answer
Net benefit = Benfit - Cost
Net Benefit = 400Q-5Q2 -3Q2
Net benefit = 400Q-8Q2
The point of maximum beenfit would be where the differentiation of net benefit is equal to zero.
d(net benefit) / d Q = 400-16Q
400-16Q = 0
400=16Q
Q = 400/16
Q= 25
AT 25 units nete benfit is maximized
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