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(Solved): Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for ...



Charles has decided to open a​ lawn-mowing company. To do​ so, he purchases mowing equipment for ​$7,000​, buys gasoline ​($2.00 in gas is required to mow each​ yard), and pays a helper $15.00 per yard. Prior to opening the lawn​ company, Charles earned $8,000 as a lifeguard at the neighborhood swimming pool. Assume the money he used to purchase the mowing equipment could otherwise have earned 1 percent per year in the bank and that the mowing equipment depreciates at 10 percent per year. Charles plans to mow 350 yards per year.

What is​ Charles's implicit cost of​ production?



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