Q2. Hair Salon is an industry that is significantly all about making people look and feel great. In the past, the Hair Salon industry focused its services on females, with male clients opting for haircutting, beard cutting and a range of design and shaving services. Normally, hairdressers charge from $10 - $50 per haircut. More recently males have also become increasingly active consumers of an expansive range of skin and hair care products and services. Salon owners and beauty business professionals spend more time focusing on their local competition However, owner of Tony&Guy claim that they are at the forefront of innovative colour techniques and styling, delivering personalised consultation and experience to their customers.

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Q2a.What determines the price elasticity of demand for a monopolistically competitive firm's product? (5 marks)

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