1. Suppose the pleasure Romeo gets from giving the fair Juliet roses for valentines day next...
1. Suppose the pleasure Romeo gets from giving the fair Juliet roses for valentines day next weekend can be described by a dollar benefit function B(r)= 3.4r - 0.1r^2
a. What is the equation of romeos marginal benefits, MB(r)?
b. What is romeos marginal benefit if he gave Juliet 10 roses?
c. Suppose roses cost $1 each. How many boded will Romeo give to Juliet?
Show how you got your answers.
Homework Answers
A) B(r)=3.4r-0.1*r^2
MB= DERIVATIVE of total Benefit
MB=3.4-0.2r
B) r=10
MB=3.4-0.2*10=3.4-2=1.4
C) pr=$1
The optimal number of roses is where,
MB=pr
So,
3.4-0.2r=1
2.4=0.2r
r=2.4/0.2=12
So Romeo will give 12 roses to Juliet
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