Suppose that you can hire your mechanic for up to six hours.The total benefit and total cost functions are B(H)= 300H - 20H² and C(H)= 55H + 60H².The corresponding formulas for marginal benefit and marginal cost are MB(H)= 300 - 40H and MC(H)= 55 + 120H.For how many hours should you hire your mechanic? A) 1.53 hours B) 0.65 hours C) 6 hours D) 0 hours

Question

Quizplus · Accepted Answer

To maximize the benefit from hiring a mechanic, we need to equate the marginal benefit and marginal cost.

300 - 40H = 55 + 120H

Solving for H, we get H = 1.53 hours.

This means that if we hire the mechanic for 1.53 hours, the marginal benefit equals the marginal cost, and we are maximizing our benefit while minimizing our cost. Therefore, A) 1.53 hours is the best choice.

Suppose That You Can Hire Your Mechanic for Up to Six