Three college students consider the option of forming a lawn care and landscaping business during their summer vacation. They estimate the following costs: Insurance $ 2,600 for the summer Equipment Rental Fees $1,000 for the summer Fuel and Supplies $4 per lawn Miscellaneous Expenses $2 per lawn Their projected revenue depends on the number of lawns serviced. The price per job is $30. The going wage for a typical unskilled college student is about $2,400 for the summer months. Realistically, the small business should expect to service about 200 lawn jobs during the summer. Should the three students launch the business? Why or why not?

Three college students consider the option of forming a lawn care and landscaping business during their summer vacation. They estimate the following costs: Insurance $ 2,600 for the summer Equipment Rental Fees $1,000 for the summer Fuel and Supplies $4 per lawn Miscellaneous Expenses $2 per lawn Their projected revenue depends on the number of lawns serviced. The price per job is $30. The going wage for a typical unskilled college student is about $2,400 for the summer months. Realistically, the small business should expect to service about 200 lawn jobs during the summer. Should the three students launch the business? Why or why not?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter18: Pricing The Factors Of Production

Section: Chapter Questions

Problem 2TY

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