Exhibit 7-15 Short-run cost curves for E-Z Care lawn mowing company In Exhibit 7-15, if the market price of mowing lawns is $16 per lawn, then E-Z-Care will earn the biggest profit by mowing:

Question

Exhibit 7-15  Short-run cost curves for E-Z Care lawn mowing company  In Exhibit 7-15, if the market price of mowing lawns is $16 per lawn, then E-Z-Care will earn the biggest profit by mowing:

Quizplus · Accepted Answer

The profit-maximizing quantity for a firm is where marginal cost equals marginal revenue. In this case, if the market price is $16 per lawn, then the marginal revenue for each additional lawn is also $16. Looking at the graph of E-Z-Care's cost curves, we can see that their marginal cost is lowest at 8 lawns per day. At this quantity, E-Z-Care's marginal cost intersects with the market price of $16, indicating that they will earn the biggest profit by mowing 8 lawns per day.

Exhibit 7-15 Short-Run Cost Curves for E-Z Care Lawn Mowing Company