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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 (rounded to the nearest whole number)?

User BofA
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Whenever you face the problem that deals with maxima or minima you should keep in mind that minima/maxima of a function is always a point where it's derivative is equal to zero.
To solve your problem we first need to find an equation of net benefits. Net benefits are expressed as a difference between total benefits and total cost. We can denote this function with B(y).

B(y)=b-c
B(y)=100y-18y²

Now that we have a net benefits function we need find it's derivate with respect to y.


(dB(y))/(dy) =100-36y

Now we must find at which point this function is equal to zero.

0=100-36y
36y=100
y=2.8

Now that we know at which point our function reaches maxima we just plug that number back into our equation for net benefits and we get our answer.

B(2.8)=100(2.8)-18(2.8)²=138.88≈139.

One thing that always helps is to have your function graphed. It will give you a good insight into how your function behaves and allow you to identify minima/maxima points.


User Bhansa
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