Question
ob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawn a day. What can you say about Bob's short-run decision regarding shut down and his long-run decision regarding exit.
Answers
Take a shot, what do you think?
Hint: if a firm's revenue is greater than its variable costs, but less than its total costs, it should stay in business in the short run.
Hint: if a firm's revenue is greater than its variable costs, but less than its total costs, it should stay in business in the short run.
Related Questions
you are hired as the consultant to a monopolistically competitive firm. The firm reports the followi...
Juan mows lawns in his neighborhood for extra money. Suppose the demand for lawn mowing in Joe’s nei...
The total cost faced by a firm in a perfectly competitive is given as:
TC = 600-100Q+0.5Q2
i. F...