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Cost-Benefit Analysis Practice Test
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Q1
A delivery company is deciding how many additional delivery routes to add on Saturdays (each unit is one route). According to the marginal benefit and marginal cost data in the table, at which quantity should the company stop adding routes?
Routes (Q) MB, $ MC, $ 1 900 500 2 800 600 3 700 700 4 600 800 5 500 900
A delivery company is deciding how many additional delivery routes to add on Saturdays (each unit is one route). According to the marginal benefit and marginal cost data in the table, at which quantity should the company stop adding routes?
| Routes (Q) | MB, $ | MC, $ |
|---|---|---|
| 1 | 900 | 500 |
| 2 | 800 | 600 |
| 3 | 700 | 700 |
| 4 | 600 | 800 |
| 5 | 500 | 900 |