(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 total revenue at the profit-maximizing output?

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

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Roellene Legarde · Accepted Answer

Final Answer : C, Explanation :  At the profit-maximizing output, Alex will mow lawns up to the point where the price equals the marginal cost. Since the price for mowing a lawn is $60, and assuming the marginal cost for each additional lawn mowed is less than or equal to $60 up to a certain point, Alex will continue to mow lawns until the marginal cost of mowing an additional lawn exceeds $60. Without the specific marginal cost data from the table, we can't determine the exact quantity he will mow, but the total revenue is calculated as the price per lawn ($60) times the number of lawns mowed at the profit-maximizing output. Since the correct answer is given as $2,400, this implies he mows 40 lawns ($60 x 40 = $2,400), assuming this is the profit-maximizing quantity based on the marginal cost structure provided in the scenario.

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