You are the CEO of a company that makes athletic shoes. Your firm's research department has estimated your total revenues to be R(Q) = 3000Q - 8Q^2 and your total costs to be C(Q) = 100 + 2Q^2. (Note that MB = 3000 - 16Q and MC = 4Q.) a. What level of Q maximizes net benefits? b. What is the marginal benefit at this level of Q? c. What is the marginal cost at this level of Q? d. What is the maximum level of net benefits? e. What is another word for net benefits in this example?
Added by Denise I.
Step 1
This gives us the equation: \[3000 - 16Q = 4Q\] Solving for Q, we get: \[20Q = 3000\] \[Q = 150\] So, the level of Q that maximizes net benefits is 150. ** Show more…
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