You are the manager of a firm that specializes in small single-board widgets. Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions: Control Variable Z Total Benefits B(Z) Total Cost C(Z) 0 0 0 1 200 10 2 380 30 3 540 60 4 680 100 5 800 150 6 900 210 7 980 280 8 1,040 360 9 1,080 450 10 1,100 550 a. How many units (Z) maximize net benefits? b. What is the relationship between marginal benefits and marginal costs at the level of Z you determined above? c. Graph the total cost and total benefit curves. d. On another graph, plot the points for the marginal cost, marginal benefit, and marginal net benefit. e. Show how the two graphs relate to each other.
You are the manager of a firm that specializes in small single-board widgets. Your goal is to determine the number of units (Z) that must be produced and sold by your firm each month in order to maximize profits. The total benefits (revenues) and costs to your firm of producing various quantities are given in the first three columns of the following table. Based on this scenario, complete the table and answer the accompanying questions:
Control Variable Z Total Benefits B(Z) Total Cost C(Z)
0 0 0
1 200 10
2 380 30
3 540 60
4 680 100
5 800 150
6 900 210
7 980 280
8 1,040 360
9 1,080 450
10 1,100 550
a. How many units (Z) maximize net benefits?
b. What is the relationship between marginal benefits and marginal costs at the level of Z you determined above?
c. Graph the total cost and total benefit curves.
d. On another graph, plot the points for the marginal cost, marginal benefit, and marginal net benefit.
e. Show how the two graphs relate to each other.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
