Asked by Aiden Kravitz on Jun 19, 2024
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(Table: Variable Costs for Lawns) Use Table: Variable Costs for Lawns.During the summer,Alex runs a lawn-mowing service,and lawn-mowing is a perfectly competitive industry.Assume that costs are constant in each interval;so,for example,the marginal cost of mowing each of the lawns from 1 through 10 is $10.Also assume that he can only mow the quantities of lawn given in the table (and not numbers in between) .His only fixed cost is $1,000 for the mower.His variable costs include fuel,his time,and mower parts.If the price for mowing a lawn is $40,how many lawns will Alex mow?
A) 0
B) 20
C) 30
D) 40
Variable Costs
Variable costs fluctuate with the level of output, increasing as production rises and decreasing as production falls.
Lawn-mowing
The process of cutting the grass in a yard or garden to maintain its appearance and health, often using a manual or motorized lawnmower.
Perfectly Competitive
A market structure characterized by a large number of small firms, a homogenous product, perfect information, and no barriers to entry or exit.
- Establish the maximum profit-generating output quantity by evaluating marginal costs against market prices.
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Learning Objectives
- Establish the maximum profit-generating output quantity by evaluating marginal costs against market prices.
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