Raphael's hair salon is a profit-maximizing single price monopoly located in a small town, and is currently earning an economic profit. (a) Does Raphael's hair salon produce the allocatively efficient quantity? Explain. (b) Assume that Raphael signs a new lease with an increase in rent, a fixed cost. Will the price of haircuts provided by Raphael increase, decrease, or stay the same in the short run? Explain. (c) Assume that new hair salons enter the market and that the market becomes monopolistically competitive. Answer each of the following. i. The entry of new hair salons creates close substitutes for each individual salon's services. As a result, will the demand for Raphael's hair salon become more elastic, less elastic, or will there be no change in the elasticity? ii. Will the entry cause the demand curve for Raphael's haircuts to shift to increase, decrease, or stay the same? iii. In long-run equilibrium, will Raphael's hair salon produce the productively efficient quantity? Explain.

Q: I need help working through this problem

A: Market clearing price and quantity is archived where both seller and buyer agree to exchange their…

Q: An agricultural seed company has an inverse demand given by: P = 120 - 2Q, and a cost function given…

A: Note : In case of multiple questions , we answer only the first question.  The answer to your first…

Q: definition of products, goods and services

A: TO understand the definition of these terms, we need to understand that goods and products are used…

Q: the quantity of a good or service which consumers want and have the ability to purchase

A: Quantity- It is the number or amount of goods or services.

Q: Tutorial

A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only first…

Q: Why are families so important to the American economy?

A: Rising monetary disparity in the United States and all over the planet is broadly considered a…

Q: dccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc…

A: Your question is not visible.

Q: i need help with all of them

A: The government uses price controls to exert direct influence over market prices. It has an impact on…

Q: how do you write an audit of how you nonverbally communicate?

A: Title: Audit of Nonverbal Communication SkillsIntroduction:This audit aims to evaluate and assess…

Q: What important informations are required in evaluations?

A: Evaluation can be understood as a systematic and objective assessment of an ongoing or completed…

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.