Exhibit 7-15 Short-run cost curves for E-Z Care lawn mowing company

-In Exhibit 7-15,suppose the market price of mowing lawns falls to $10 per lawn.In this situation,E-Z-Care will:

Question

Exhibit 7-15 Short-run cost curves for E-Z Care lawn mowing company
 
-In Exhibit 7-15,suppose the market price of mowing lawns falls to $10 per lawn.In this situation,E-Z-Care will:

Quizplus · Accepted Answer

E-Z-Care will continue to mow lawns despite its economic losses if the price covers the variable costs, as shutting down would mean covering fixed costs without any revenue.

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