Suppose total benefits and total costs are given by B(Y)= 220Y − 15Y² and C(Y)= 10Y.What level of Y will yield the maximum net benefits? A) 7 B) 10/9 C) 5 D) 150/20

Question

Quizplus · Accepted Answer

The maximum net benefits occur when the marginal benefits equal the marginal costs. To find this, we first need to find the derivative of the benefit and cost functions with respect to Y. The derivative of B(Y) = 220Y - 15Y^2 is dB/dY = 220 - 30Y, and the derivative of C(Y) = 10Y is dC/dY = 10. Setting dB/dY equal to dC/dY gives 220 - 30Y = 10, solving for Y gives Y = 7.

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