Question

Ronnie operates a lawn care service. on each day, the cost ofmowing the first lawn is $10: the cost of mowing the second lawn is$12: and the cost of mowing the third lawn is $15. His producersurplus on the first three lawns of the day is $53. if Ronniecharges all customers the same price for lawn mowing, that priceis.

a. $25
b. $30
c. $36
d. $45

Answer 1

b. $30

Step-by-step explanation:

producer surplus = price producer able to sell - price producer would be willing to sell

⇔ price producer able to sell = producer surplus + price producer would be willing to sell = 53 + (10+12+15) = $90 for 3 lawn

if Ronnie charges all customers the same price for lawn mowing, that price is $30 (= $90/3)