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Ann owns a lawn-mowing company. She has 400 lawns she requires to cut every week. Her weekly revenue from these 400 lawns is $20,000. Given an 18-inch-deck push mower, a laborer can cut every lawn in two hours. Given a 60-inch-deck riding mower, a laborer can cut every lawn in 30 minutes. Labor is supplied inelastically at $5.00 per hour. Every laborer works eight hours a day and five days each week. a. If Ann decides to have her workers use push mowers, how many push mowers will Ann rent and how many workers will she hire?
b. If she decides to have her workers use riding mowers, how many riding mowers will Ann rent and how many workers will she hire?
c. Assume the weekly rental cost (including gas and maintenance) for each push mower is $240 and for each riding mower is $ 1,800. What equipment will Ann rent? How many workers will she employ? How much profit will she earn?
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CHARACTERISTICS OF MANAGERIAL ECONOMICS 1. Uses theory of firm: Managerial economics uses economic principles and conceptsthat are known as theory of Firm or 'Economics of the
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