Compute the Cost. Edward the entrepreneur takes 2 hours to cut a lawn and he cuts 500 lawns per year. He uses solar-powered equipment (truck and mower) that will last forever-and could be sold at any time for $20,000. Edward could earn $20 per hour as a pedicurist. The interest rate is 10 percent. a. Given his current output level, his marginal cost is $40 (enter your response to the nearest dollar) and his average cost is $44 (enter your response to the nearest dollar). b. Suppose he decides to reduce the number of lawns cut by half, to 250 per year. His new marginal cost is $ (enter your response to the (enter your response to nearest dollar) and his new average cost is s
Compute the Cost. Edward the entrepreneur takes 2 hours to cut a lawn and he cuts 500 lawns per year. He uses solar-powered equipment (truck and mower) that will last forever-and could be sold at any time for $20,000. Edward could earn $20 per hour as a pedicurist. The interest rate is 10 percent. a. Given his current output level, his marginal cost is $40 (enter your response to the nearest dollar) and his average cost is $44 (enter your response to the nearest dollar). b. Suppose he decides to reduce the number of lawns cut by half, to 250 per year. His new marginal cost is $ (enter your response to the (enter your response to nearest dollar) and his new average cost is s
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 4CQQ
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Transcribed Image Text:Compute the Cost. Edward the entrepreneur takes 2 hours to cut a
lawn and he cuts 500 lawns per year. He uses solar-powered equipment
(truck and mower) that will last forever and could be sold at any time
for $20,000. Edward could earn $20 per hour as a pedicurist. The
interest rate is 10 percent.
a. Given his current output level, his marginal cost is $40 (enter your
response to the nearest dollar) and his average cost is $44 (enter your
response to the nearest dollar).
b. Suppose he decides to reduce the number of lawns cut by half, to
250 per year. His new marginal cost is $ (enter your response to the
nearest dollar) and his new average cost is $ (enter your response to
the nearest dollar).
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