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Suppose that the demand function for men's haircuts in a city is as follows: Qd = 500 - 30p +0.08M, where p is the price
Suppose that the demand function for men's haircuts in a city is as follows:
Qd = 500 - 30p +0.08M,
where p is the price of haircuts and M is the average monthly income in the city.
Suppose that the supply function for haircuts is
Qs = 100 + 20p -30w
where p is the price of haircuts and w is the average hourly wage of barbers.
Assume that M = $5000 and w = $10
Calculate the equilibrium quantity in this market.
a. | 300 | |
b. | 240 | |
c. | 500 | |
d. | None of the choices |
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