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stepan [7]
3 years ago
7

Kay’s dog-walking service is a profit-maximizing, competitive firm. Kay walks dogs for $7.50 each. Her total cost each day is $4

5—she spends $35 a day on gas driving to different neighborhoods, and her liability insurance and other fixed costs average out to $10 per day.
If Kay walks five dogs a day, she should shut down or operate in the short run?
Business
1 answer:
devlian [24]3 years ago
6 0

Answer:

Because he is able to cover the variable cots, he should keep going in the short run. He must increase the number of walks to cover the fixed costs.

Explanation:

Giving the following information:

Kay walks dogs for $7.50 each. Her total cost each day is $45—she spends $35 a day on gas driving to different neighborhoods, and her liability insurance and other fixed costs average out to $10 per day.

Kay walks five dogs a day.

Income= 7.5*5= $37.5

Total cost= 45

Loss= (7.5)

Because he is able to cover the variable cots, he should keep going in the short run. He must increase the number of walks to cover the fixed costs.

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