Bob'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 lawns a day. What can you say about Bob's short run decision regarding shut-down and his long-run decision regarding exit? Question 3 options: Bob should stay in business in the short run as well as in the long run Bob should quit his business immediately Bob should stay in business in the short run but quit in the long run None of the other answers are correct
Bob'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 lawns a day. What can you say about Bob's short run decision regarding shut-down and his long-run decision regarding exit? Question 3 options: Bob should stay in business in the short run as well as in the long run Bob should quit his business immediately Bob should stay in business in the short run but quit in the long run None of the other answers are correct
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Bob'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 lawns a day. What can you say about Bob's short run decision regarding shut-down and his long-run decision regarding exit?
Question 3 options:
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Bob should stay in business in the short run as well as in the long run |
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Bob should quit his business immediately |
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Bob should stay in business in the short run but quit in the long run |
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None of the other answers are correct |
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