WebThe goal is to maximize net benefit of an activity. By calculating the difference between total benefits and total costs, we can determine which level will maximize net benefits. To maximize net benefit, continue the activity as long as Marginal Benefit ≥ Marginal Cost Web4. Assume that the total benefit resulting from a continuous decision, Q, is B (Q) = 200 - 2Q2 and the corresponding total cost is C (q) = 4 + 202. Use calculus (until 2nd derivative) to determine the level of Q that maximizes total benefit. (Show solutions.) 5. Consider the cost function: C (X) = 0.004X + 20X + 1000.
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WebWell, the more exercise equipment that's out there, the more people that are gonna exercise, it's going to make them happier, it's going to lower their healthcare costs, and so we would wanna add that benefit, that positive externality, to the marginal private benefit curve to get the marginal social benefit curve. So, let's do that. WebTotal benefit from the project = $ 250,000 + $ 30,000 = $ 280,000. Total Cost from expansion = Salary of new employees + Cost of hiring + Cost of additional hardware and software. Total Cost from expansion = $ 160,000 + $15,000 + $25,000. Total Cost from expansion = $ 200,000. Now the benefit-cost ratio will be calculated for the expansion. WebMC = MB leads to UNIQUE solution • Marginal costs = marginal benefitswill lead to the unique optimal decision. • Total Benefit > Total Cost will NOT lead to a unique solution. Since both benefits and costs will normally rise with the level of an activity, many possible levels have total benefits greater than total costs. goob they all hated me