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Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
Edition 8ISBN: 978-1259129858Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
Edition 8ISBN: 978-1259129858 Exercise 23
Suppose the marginal cost of writing a contract of length L is MC ( L ) = 20 + 5 L. Find the optimal contract length when the marginal benefit of writing a contract is:
a. MB ( L ) = 120.
b. MB ( L ) = 180.
c. What happens to the optimal contract length when the marginal benefit of writing a contract increases?
a. MB ( L ) = 120.
b. MB ( L ) = 180.
c. What happens to the optimal contract length when the marginal benefit of writing a contract increases?
Explanation
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The optimal length of writing a contract...
Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince
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