John’s Lawn Moving Service is a small business that acts as a price taker (i.e., MR = P). The...

Question

John’s Lawn Moving Service is a small business that acts as a price taker (i.e., MR = P). The prevailing market price of lawn mowing is $20 per acre. John’s costs are given by total cost = 0.1q²+ 10q + 50, where q = the number of acres John chooses to cut a day.

a. How many acres should John choose to cut in order to maximize profit?

b. Calculate John’s maximum daily profit.

c. Graph these results and label John’s supply curve.

Robert · Accepted Answer

Given Data: 
Price of lawn moving per acre                              
Cost function is                                  
Road to questions: 
Total revenue function
Profit function
Solution: 
Part (a):   How many acres should John choose to cut in order to maximize profit?

John’s Lawn Moving Service is a small business that acts as a price taker (i.e., MR = P). The prevailing market price of lawn mowing is $20 per acre. John’s costs are given by total cost = 0.1q 2 +...

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