Total Number of Tents Total Benefit 1800 3300 4500 5400 6

Total Number of Tents Total Benefit $ 1,800 $3,300 $4,500 $ 5,400 $ 6,000 $ 6.400 Total Cost $ 1.400 $ 2,800 $ 4.200 $ 5,600 $ 7.000 $ 8.400 2 3 4 How many tents should Karen rent? ng to Save

Solution

Ans. 3 units.

Up to the 3rd unit the total benefit outweighs the total cost and the 4th unit onwards the total cost outweighs than the total benefit so this is not efficient outcome for her. So Karen should rent 3 units of tents an this will maximize her utility.