Use the Following to Answer Question

question 230

Multiple Choice

Use the following to answer question:
-(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 $60,how much is Alex's profit per unit at the profit-maximizing output?

• A)$7.50
• B)$32.50
• C)$20.00
• D)$60.00

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Definitions:

Peak Periods

Times of highest activity or demand in a particular process or system.

Output

The amount of something produced by a person, machine, or industry.

Large Dams

Substantial barriers constructed across rivers or waterways to control the flow or storage of water.

Hydroelectric Power

The generation of electricity by converting the kinetic energy of moving water, typically through the use of dams or diversionary structures.