Exhibit 7-15 Short-run cost curves for E-Z Care lawn mowing company In Exhibit 7-15, what market price would cause E-Z-Care to just beak even?

Question

Exhibit 7-15  Short-run cost curves for E-Z Care lawn mowing company  In Exhibit 7-15, what market price would cause E-Z-Care to just beak even?

Quizplus · Accepted Answer

The break even point is where the total cost curve intersects with the total revenue curve. In Exhibit 7-15, this occurs at the output level of 300 lawns and a cost of $3,600. At a price of $12 per lawn, total revenue is also $3,600, which means that E-Z Care would just break even at this price. Therefore, the correct answer is C.

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