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# Q: Find the optimal contract length when the marginal cost of writing a contract of length L

1. Suppose the marginal benefit of writing a contract is $50, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is: a. MC(L) = 10 + 2L. b. MC(L) = 5 + 2L. c. What happens to the optimal contract length when the marginal cost of writing a contract declines?2.Suppose the marginal cost of writing a contract of length L is MC(L) = 10 + 2L. Find the optimal contract length when the marginal benefit of writing a contract is: a. MB(L) = 100. b. MB(L) = 150. c. What happens to the optimal contract length when the marginal benefit of writing a contract increases? Want an Answer? Choose a Subject » Select Duration » Schedule a Session Related Questions in Others • Q: Optimal quantity of labor (Solved) April 14, 2013 Assume the price of output is p = 10 dollars, the marginal product of labor is given by the equation MPL= 20-( 1/2 ) L , and the price of labor is w L =... Solution Preview : 20 - (1/2)L, and the price of labor is wL = 100 dollars. Then, the optimal quantity of labor is a) 5... • Q: Assignment (Solved) February 11, 2012 could you do it please ! • Q: Suppose that Honda is on the verge of signing a 15-year contract with TRW... January 28, 2012 introduced a comparable airbag using a new technology that reduces the cost by 30 percent. How would this information affect Honda’s optimal contract length with... • Q: general equilibrium-pure exchange economy (Solved) April 07, 2013 I have a question regarding the demands that are calculated on page 85 , from the exercise starting in page 84. I don’t understand the calculations that have been done to reach the result... Solution Preview : Maximization problem is max v XAYA subject to the budget constraint Px XA + Py YA = Px + 2Py (XAYA) So the Lagrange is L= (XA *YA )^(1/2) + ? ( Px *XA+ Py * YA- Px-2* PY ) (* indicates... • Q: Economic Assignment (Solved) August 20, 2012 As attached. Solution Preview : Question 1. EverClean Services provides daily cleaning maintenance of toilets in food courts in Singapore. Dozens of firms provide similar service. The service is standardized; each company... ## Ask a New Question Copy and paste your question here... Have Files to Attach? Similar question? edit & resubmit » ## Transtutors Study Membership • Unlimited Access to 600,000+ textbook solutions and Classroom Assignments • 24/7 Study Help from experts • Plans start from$20/mo
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