barbers

# barbers - Practice Quiz on Entry and Exit 1 Demand for...

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Practice Quiz on Entry and Exit 1. Demand for haircuts in the city of San Barberia is given by the function P=39-Q/20, where Q is the number of haircuts per day and P is the price of a haircut. Everyone who opens a barber shop in town has a fixed cost of \$200 per day which must be paid so long as a shop is in business and regardless of the number of haircuts it sells. There is also a variable cost of \$4 for each customer served. Each barber shop has a capacity of 40 customers per day. San Barberia currently has 12 barbershops. A barber shop that is open cannot escape its fixed costs immediately, but must give 6 months notice to its landlord of its intension to close. It also takes about 6 months to organize and open a new barber shop. The short run supply curve for haircuts in San Barberia consists of (a) a vertical segment extending from the origin to the point (0,4) and an unbounded horizontal line extending to the right of the point (0,4) (b) a vertical segment extending from the origin to the point (0,4), a horizontal segment extending from (0,4) to (480,4), and a vertical segment extending upwards from (480,4). (c) a vertical segment extending from the origin to the point

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## This note was uploaded on 12/25/2011 for the course ECON 1 taught by Professor Bergstrom during the Fall '07 term at UCSB.

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barbers - Practice Quiz on Entry and Exit 1 Demand for...

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