Question

Table: Variable Costs for Lawns Table: Variable Costs for Lawns Quantity Variable Costs of Law 0 SO 10 100 20 300 30 500 40 1.100 50 1.800 60 2.500 Use Table: Variable Costs for Lawns. During the summer, Alex runs a lawn mowing service in 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. What is Alex's break-even price? $50.00 $100.00 $10.00 $27.50 3 $ 4 S & 7 6 8 9 0 de E R т Y U I o P F G H K L V > C V B N M ge command option

Answer 1

Ans

$50

Explanation:

Q	VC	FC	TC	ATC
0	0	1000	1000
10	100	1000	1100	110
20	300	1000	1300	65
30	500	1000	1500	50
40	1100	1000	2100	52.5
50	1800	1000	2800	56
60	2900	1000	3900	65

FC doesnot changes with output.

TC=FC+VC

ATC=TC/Q

break even price is minimum ATC. here 50 is minimum ATC so it will be breakeven price.