Figure 11.9
-Refer to Figure 11.9.Figure 11.9 depicts a monopolistically competitive barber shop.Use the diagram to answer the following questions.
a.Suppose the average variable cost of production is $15 when output equals 110 haircuts and $15.25 when output equals 140 haircuts.If the firm wants to maximize its profit or minimize its losses, how many haircuts will it produce and what price should it charge? Explain your answer.
b.Calculate the firm's profit or loss.
c.What is likely to happen in this industry over time as it moves to its new long-run equilibrium?
d.Suppose the barber shop depicted in the diagram remains in the industry.Is this barber shop likely to produce this same quantity of haircuts as in part (a)in the long run?
Definitions:
Behavioral Problems
Actions or attitudes displayed by individuals, often children, that are inappropriate or challenging for others to manage.
Emotional Safety
signifies a state of being in which an individual feels secure to express their emotions, thoughts, and vulnerabilities without fear of judgment or harm.
Medical Services
Professional healthcare services provided by doctors, nurses, and other medical practitioners.
George Herbert Mead
An American philosopher, sociologist, and psychologist, known for his work on the development of the self and his concept of the social self.
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