Use the Following to Answer Questions

question 278

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

• A) -$10
• B) $10
• C) $34
• D) $14

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Definitions:

Customer Waiting Time

The amount of time a customer waits before receiving a service or good.

Queuing Theory

A mathematical study of waiting lines or queues, focused on understanding and optimizing processes in which entities wait for service.

Waiting Time

The period during which one waits for something to happen or arrive.

Hierarchy of Authority

An organizational structure where every entity in the organization, except one, is subordinate to a single other entity.