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# The Hair Cuttery, a new hair salon, is ready to start hiring. The table above shows the relationship ...

wrote...
Posts: 341
3 days ago

Table 17-6

 Number of Hairdressers Haircuts per Day Marginal Product Marginal Revenue Product 1 8 ​ ​ 2 16 ​ ​ 3 23 ​ ​ 4 29 ​ ​ 5 34 ​ ​ 6 38 ​ ​

Refer to Table 17-6. The Hair Cuttery, a new hair salon, is ready to start hiring. The table above shows the relationship between the number of hairdressers the firm hires and the quantity of haircuts it produces.

 a. Suppose the price of haircuts is $8. Complete the table by filling in the values for marginal product and marginal revenue product.  b. The Hair Cuttery is an input price-taker. Suppose the wage paid to hairdressers is$40 per
day. What is the profit-maximizing number of hairdressers?
 c. Suppose the wage rate rises to $60 per day. (i) What happens to the firm's demand curve for hairdressers? (ii) What happens to the profit-maximizing quantity of hairdressers?  d. Suppose the wage rate is$40 per day and the price of haircuts is now \$10.

(i) What happens to the firm's demand curve for hairdressers?

(ii) What happens to the profit-maximizing quantity of hairdressers?

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## InMicro

Edition: 1st
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joanametjoanamet
wrote...
Posts: 324
3 days ago
equals the wage rate.
 c. (i) The demand curve does not change.

(ii) The profit-maximizing quantity of hairdressers falls to 2.

 d. (i) The demand curve shifts to the right.

(ii) The profit-maximizing quantity of hairdressers increases to 6.

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