Use the Following to Answer Questions

question 200

Multiple Choice

Use the following to answer questions:
-(Table: Variable Costs for Lawns) Look at the 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; that is, the variable cost of mowing 1 through 10 lawns is $100. 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 total revenue at the profit-maximizing output?

• A) $60
• B) $1,100
• C) $2,400
• D) $2,100

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Definitions:

Dividend Income

consists of payments received by shareholders from stocks or mutual funds, representing a share of the profits of the corporation or fund.

Taxable Income

The amount of an individual's income that is subject to taxation, after all deductions and exemptions.

Domestic Corporations

Companies that are incorporated and operate within the country of their incorporation, subject to its laws and taxation.

Earnings and Profits

A tax term referring to the net income of a company with adjustments for certain tax-related items; crucial for determining how distributions to shareholders are taxed.