Final answer:
Rina's lawn-mowing business, as a profit-maximizing, competitive firm mows 5 lawns a day at $30 each. Her fixed cost is $50 and total daily costs are $250, leading to a daily loss of $100.
Step-by-step explanation:
Profit Maximization in a Competitive Firm:
Rina's lawn-mowing service, being a profit-maximizing, competitive firm, mows lawns for a fixed price of $30 each. With a total daily cost of $250, of which $50 is a fixed cost, she mows 5 lawns per day. To calculate Rina's daily profits, we first determine her total revenue by multiplying the price per lawn ($30) by the number of lawns she mows daily (5), resulting in $150. Her total cost includes a fixed cost of $50 and variable costs of $200 ($250 - $50). Subtracting the total cost from her total revenue gives us Rina's profit for the day.
The analysis involves understanding concepts such as fixed costs, variable costs, total revenue, and profit. In Rina's case, her fixed cost (depreciation of equipment, rental costs, etc.) does not change with the number of lawns mowed, while the variable costs (fuel, labor, maintenance, etc.) may vary with the volume of service provided. Profit is calculated using the formula: Profit = Total Revenue - Total Cost. Applying this to Rina's service, we get: Total Revenue = $30 per lawn × 5 lawns = $150