Multiple Choice
Nikos' lawn-mowing service is a profit-maximizing, competitive firm. If Nikos mows ten lawns per day at a price of $27 per lawn and has a total cost of $280, of which $30 is a fixed cost, what should Nikos do in the short run?
A) Shut down, since he is not covering his fixed costs
B) Continue operating, since he is covering part of his fixed costs and all his variable costs
C) Raise the price, so that he can cover his fixed costs
D) Lower his fixed costs to become more competitive
Correct Answer:
Verified
Correct Answer:
Verified
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