Suppose total benefits and total costs are given by B(Y) = 100Y - 8Y² and C(Y) = 10Y².What is the maximum level of net benefits? A)92. B)139. C)78. D)none of the statements associated with this question are correct.

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Quizplus · Accepted Answer

The maximum level of net benefits can be found by subtracting the total cost function from the total benefit function, NB(Y) = B(Y) - C(Y) = 90Y - 8Y². To find the maximum level of net benefits, we take the derivative of this function with respect to Y and set it equal to zero: dNB/dY = 90 - 8² = 0. Solving for Y, we get Y = (1/11)². Substituting this value back into the net benefit function, we get NB(max) = B(Y) - C(Y) = 139. Therefore, the best choice is B, which yields the maximum level of net benefits.

Suppose Total Benefits and Total Costs Are Given by B(Y)