The University is considering the level of light to provide

The University is considering the level of light to provide at night on campus. Cynthia and Shirley are the only students who work on campus at night. Cynthia\'s marginal benefit for light is given by MBCynthia50 5Q, where Q is the brightness of light; while Shirley\'s marginal benefit is MBShirley 10-Q. If there are no fixed costs, and the marginal cost of providing light is given by MC-12, then what is the optimal brightness of light for the university to provide? 8 O10 4 None of the above.

Solution

Ams: 8

Explanation:

The combined MB = (50 - 5Q) + (10 - Q) = 60 - 6Q

MC = 12

The optimization condition is: MB = MC

60 - 6Q = 12

6Q = 60 -12 = 48

Q = 48 / 6 = 8