Use the Following to Answer Question

question 321

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 $70,how much is Alex's total revenue at the profit-maximizing output?

• A)$3,500
• B)$2,800
• C)$2,100
• D)$1,800

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Definitions:

Debt-To-Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity, indicating the proportion of equity and debt used to finance a company's assets.

Dividend Payout Ratio

A financial ratio that measures the proportion of earnings paid out as dividends to shareholders.

Debt-To-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses.