Asked by Emily Fritsch 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 $70,how much is Alex's profit per unit at the profit-maximizing output?
A) -$10
B) $10
C) $34
D) $14
Variable Costs
Expenses that change in proportion to the activity of a business, such as costs for raw materials or production.
Profit-maximizing Output
This is the level of production at which a firm achieves the highest possible profit, determined by the point where marginal cost equals marginal revenue.
Total Cost
The complete cost of production, including both fixed and variable costs, incurred by a business in producing its goods or services.
- Compute the aggregate cost, total income, and earnings at the output levels where profit is maximized.
- Comprehend the principle of maximizing earnings in a market characterized by perfect competition.
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Learning Objectives
- Compute the aggregate cost, total income, and earnings at the output levels where profit is maximized.
- Comprehend the principle of maximizing earnings in a market characterized by perfect competition.
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