Three college students consider the option of forming a lawn care and landscaping business during their summer vacation. They estimate the following costs:
$\begin{array} { | l | l | }
\hline \text { Insurance } & \$ 2,600 \
\hline \text { Equipment Rental Fees } & \$ 1,000 \
\hline \text { Fuel and Supplies } & \$ 4 \text { per lawn } \
\hline \text { Miscellaneous Expenses } & \$ 2 \text { per lawn } \
\hline
\end{array}$ 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. Derive an equation for total accounting profit and total economic profit. Should the students launch the business if they expect to service about 200 lawn jobs during the summer?

Question

Three college students consider the option of forming a lawn care and landscaping business during their summer vacation. They estimate the following costs:
 $\begin{array} { | l | l | } 
\hline \text { Insurance } & \$ 2,600 \
\hline \text { Equipment Rental Fees } & \$ 1,000 \
\hline \text { Fuel and Supplies } & \$ 4 \text { per lawn } \
\hline \text { Miscellaneous Expenses } & \$ 2 \text { per lawn } \
\hline
\end{array}$ 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. Derive an equation for total accounting profit and total economic profit. Should the students launch the business if they expect to service about 200 lawn jobs during the summer?

Quizplus · Accepted Answer

The Answer of Three college students consider the option of forming a lawn care and landscaping business during their summer vacation. They estimate the following costs:
 $\begin{array} { | l | l | } 
\hline \text { Insurance } & \$ 2,600 \
\hline \text { Equipment Rental Fees } & \$ 1,000 \
\hline \text { Fuel and Supplies } & \$ 4 \text { per lawn } \
\hline \text { Miscellaneous Expenses } & \$ 2 \text { per lawn } \
\hline
\end{array}$ 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. Derive an equation for total accounting profit and total economic profit. Should the students launch the business if they expect to service about 200 lawn jobs during the summer?

Three College Students Consider the Option of Forming a Lawn