Unformatted text preview: Since marginal cost is less than marginal benefit, we take the action. Hour 3: we gain an additional 30 customers and each customer spends $10 so that is a total of $300. The cost of the hour of advertising is $300. Since marginal cost is equal to marginal benefit, we are willing to take the action. We do not lose anything and more customers are generally preferred to less. Hour 4: we gain an additional 10 customers and each customer spends $10 so that is a total of $100. The cost of the hour of advertising is $300. Since marginal cost is greater than marginal benefit, we do not take the action. Hour 5: we would not advertise the 5 th hour as it gains us no additional customers....
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 Spring '08
 UnderwoodCaputo
 Economics, Microeconomics, Binary relation

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