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According to the marginal analysis, determine the optimal quantity of

eye surgeries and brie y explain. Qty TC TB AC AB MC MB 1 200 1000
2 400 1500 3 700 1800 4 950 2000 5 1300 2100 6 1650 2160 7 1900
2200 (10 Marks, max 400 words

Expert Answer
This solution was written by a subject matter expert. It's designed to help
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Step-by-step

1st step All steps Answer only

Step 1/3

To determine the optimal quantity of eye surgeries using marginal

analysis, we need to analyze the Total Cost (TC), Total Bene t (TB),
Average Cost (AC), and Marginal Bene t (MB) and Marginal Cost (MC)
at each quantity level.

Quantity (Qty) is the number of eye surgeries performed.

Let's analyze the given data:

Qty | TC | TB | AC | AB | MC | MB
1 | 200 | 1000 | 200 | 1000 | N/A | N/A
2 | 400 | 1500 | 200 | 500 | 200 | 500
3 | 700 | 1800 | 233.3 | 300 | 300 | 300
4 | 950 | 2000 | 237.5 | 200 | 250 | 200
5 | 1300| 2100 | 260 | 100 | 350 | 100
6 | 1650| 2160 | 275 | 60 | 350 | 60
7 | 1900| 2200 | 271.4 | 40 | 250 | 40

Explanation:
TC: Total Cost
TB: Total Bene t
AC: Average Cost (TC / Qty)
AB: Average Bene t (TB / Qty)
MC: Marginal Cost (change in TC / change in Qty)
MB: Marginal Bene t (change in TB / change in Qty)

Step 2/3

To determine the optimal quantity, we need to compare the Marginal

Cost (MC) with the Marginal Bene t (MB).

At Qty 1, we don't have information on MC and MB, so we cannot

determine the optimal quantity.

At Qty 2, MC (200) is less than MB (500), indicating that performing the

second eye surgery provides additional bene ts that outweigh the cost.
Therefore, performing two eye surgeries is optimal.

From Qty 3 to Qty 7, the MC is consistently higher than MB. This

suggests that the marginal cost of performing additional surgeries
exceeds the marginal bene t gained. Thus, the optimal quantity
remains at two eye surgeries.

Step 3/3

It's important to note that this analysis assumes all other factors, such
as quality of surgeries and patient outcomes, remain constant.
Additionally, further analysis and consideration of non- nancial factors
may be necessary for a comprehensive decision-making process.

Final answer

In conclusion, the optimal quantity of eye surgeries is two, based on

the marginal analysis. This means that performing the rst two
surgeries provides the highest marginal bene t compared to the
marginal cost. Performing additional surgeries would result in
diminishing marginal returns, where the cost outweighs the additional
bene t gained.

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Q: According to the marginal analysis, determine the optimal quantity

of eye surgeries and brie y explain. Qty TC TB AC AB MC MB 1 200
1000 2 400 1500 3 700 1800 4 950 2000 5 1300 2100 6 1650 2160 7
1900 2200 (10 Marks, max 400 words
A: Step-by-step answer

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