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Question 02: Marginal Principle: How Many Hours at the Barber Shop? The opportunity cost of your time spent cutting hair at your barber shop is $20 per hour. Electricity costs $6 per hour, and your weekly rent is $250. You normally stay open nine hours per day. (b) If you expect to give two haircuts in the 10th hour and you charge $15 per haircut, is it sensible to stay open for the extra hour? Why?   Question 3 options:   A)  Yes, since the marginal benefit (the revenue from the two haircuts ) is LESS THAN the marginal cost.   B)  Yes, since the marginal benefit (the revenue from the two haircuts ) is GREATER THAN the marginal cost.   C)  No, since the marginal benefit (the revenue from the two haircuts ) is LESS THAN the marginal cost.

Question 02: Marginal Principle: How Many Hours at the Barber Shop? The opportunity cost of your time spent cutting hair at your barber shop is $20 per hour. Electricity costs $6 per hour, and your weekly rent is $250. You normally stay open nine hours per day. (b) If you expect to give two haircuts in the 10th hour and you charge $15 per haircut, is it sensible to stay open for the extra hour? Why?   Question 3 options:   A)  Yes, since the marginal benefit (the revenue from the two haircuts ) is LESS THAN the marginal cost.   B)  Yes, since the marginal benefit (the revenue from the two haircuts ) is GREATER THAN the marginal cost.   C)  No, since the marginal benefit (the revenue from the two haircuts ) is LESS THAN the marginal cost.

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter6: Simple Pricing
Section: Chapter Questions
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Question 02: Marginal Principle: How Many Hours at the Barber Shop? The opportunity cost of your time spent cutting hair at your barber shop is $20 per hour. Electricity costs $6 per hour, and your weekly rent is $250. You normally stay open nine hours per day. (b) If you expect to give two haircuts in the 10th hour and you charge $15 per haircut, is it sensible to stay open for the extra hour? Why?

 

Question 3 options:

 

A) 

 Yes, since the marginal benefit (the revenue from the two haircuts ) is LESS THAN the marginal cost.
 

B) 

 Yes, since the marginal benefit (the revenue from the two haircuts ) is GREATER THAN the marginal cost.
 

C) 

 No, since the marginal benefit (the revenue from the two haircuts ) is LESS THAN the marginal cost.
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