outputs homework problem ECON help!
1. ; The manufacturer of a music company wants to maximize profits, and must decide what level of output (Q) to produce. ; The total benefits (revenues) and total costs for various levels of output are given below in millions of dollars. ; Rewrite the following table on your separate paper, and complete the table and answer the following questions.
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Output (Q) |
Total Benefits (Revenues) |
Total Costs |
Profits = Total Benefit – Total Costs |
Marginal Benefits |
Marginal Costs |
Marginal Net Benefits |
|
0 |
0 |
0 |
—– |
—- |
—- |
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1 |
100 |
10 |
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2 |
180 |
40 |
||||
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3 |
220 |
80 |
||||
|
4 |
240 |
140 |
||||
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5 |
210 |
240 |
; a. ; What level of output maximizes net benefits?
; b. ; At that level of output, what is Marginal Cost? ; What is Marginal Benefit? ;
; c. ; What would happen if the company decided to maximizes TOTAL benefits (instead of Marginal benefits)?
