1. Suppose that the total benefit and total cost from a
continuous activity are, respectively, given
by the following equations:
B(Q) = 100 + 36Q – 4Q2
C(Q) = 80 + 12Q
a. Write out the equation for the net benefits
b. What are the net benefits when Q = 1?
c. Write out the equation for the marginal net benefits
d. What are the marginal net benefits when Q = 5?
e. What level of Q maximizes net benefits?
f. At the value of Q that maximizes net benefits, what is the value of marginal net benefits?