-Bill owns a lawn-care company in Bendigo, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed. At this price, how many lawns will Bill mow per week?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms will produce where the market price equals their marginal cost (MC). Without seeing the specific cost curves, we assume that at a price of $32, the point where the price line intersects the MC curve indicates the quantity of lawns Bill will mow per week. Since we can't visually confirm the intersection point on the provided cost curves, we rely on typical economic principles for this scenario. Given the options, if $32 covers Bill's variable costs and contributes to his fixed costs, he will produce a positive quantity. The correct answer, based on the options provided and without specific curve details, is assumed to be where Bill's production is economically viable and aligns with a common output level for a small to medium-sized lawn-care business in a competitive market.

-Bill Owns a Lawn-Care Company in Bendigo, Whose Cost Curves