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Question
Franklin wants to purchase additional batting cages for his amusement park. Each batting cage costs $9,000 to set up and is expected to generate $25,000 in profit before it wears out. However, the more cages he buys, the less use they will get. He creates the following table to examine the marginal benefits of purchasing more cages. How many cages should Franklin purchase to maximize his net benefit? What is his maximum net benefit?
Unit 1 2 3 4 5 6
Marginal Benefit $25,000 $20,000 $15,000 $10,000 $5,000 $0
(1 point)
Responses
He should purchase 5 cages, which would give a net benefit of $75,000.
He should purchase 5 cages, which would give a net benefit of 75,000 dollars .
He should purchase 4 cages, which would give a net benefit of $34,000.
He should purchase 4 cages, which would give a net benefit of 34,000 dollars .
He should purchase 5 cages, which would give a net benefit of $30,000.
He should purchase 5 cages, which would give a net benefit of 30,000 dollars .
He should purchase 4 cages, which would give a net benefit of $70,000.