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26-04-2024
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In Town A, the true Marginal Benefit of a medical procedure (MB) to patients is represented by the following equation: MB=100-2Q
The patient’s marginal benefit in this example is a function of the number of procedures performed (Q). The physicians in Town A believe that the patient’s Marginal Benefit of this medical procedure (MB1) is: MB1=80-2Q.
The Marginal Cost (MC) of the Medical procedure is $20 per procedure. What is the efficient number of procedures to be performed?

Answer :

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