Business, 23.08.2020 14:01 Cheflulu5727

Table: Marginal Analysis of Sweatshirt Production II: Quantity of shirts Total Benefit (in dollars) Total Cost (in dollars)
0 $0 $0
1 16 9
2 32 20
3 48 33
4 64 48
5 80 65
Given the information above, the optimal quantity of sweatshirts that will be produced is. [Hint: Find out the MB and MC.]
a) 2
b) 3
c) 4
d) 5

Answers: 2

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Answer from: yesimabadbih5147

Optimal qauntity is 4 Units

Explanation:

Here, we have to decide quantity of production at which maximum profit can be generated. For this reason we will have to contruct a table which will help us to calculate Marginal Benefit and Marginal cost. This table is given as under:

Quantity Total benefit Marginal benefit Total Cost Marginal Cost

0 Units 0 0 0 0

1 Units 16 16 9 9

2 Units 32 16 20 11

3 Units 48 16 33 13

4 Units 64 16 48 15

5 Units 80 16 65 17

We can see that at 4 Units, marginal revenue is almost equal to marginal cost. At this level of production, we have maximum benefits generated which is:

Maximum Benefit Generated = ($16 - $9) + ($16 - $11) + ($16 - $13) + ($16 - $15) = $7 + $5 + $3 + $1 = $16 for 4 Units

We can also cross check by considering 5 units case to assess whether the benefit generated is more than 4 units case or not.

Maximum Benefit Generated (For 5 Units) = ($16 - $9) + ($16 - $11) + ($16 - $13) + ($16 - $15) + ($16 - $17) = $7 + $5 + $3 + $1 - $1 = $15 for 4 Units

As the maximum benefit generated in the case of 4 units is more because of using marginal revenue = Marginal Cost relation, hence the optimal quantity is 4 units.

Answer from: Quest

Yikes. that sucks dide

Answer from: Quest

answer: 11/12

step-by-step explanation: 4 1/4 and 3 1/3 is equivalent to 4 3/12 and 3 4/12. 4 3/12 - 3 4/12 =11/12

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Table: Marginal Analysis of Sweatshirt Production II: Quantity of shirts Total Benefit (in dollars)...

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