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There are two Barber Shops in a town, Hugo's and Hopen's, that are Bertrand competitors. Total weekly demand for haircuts in the town is Q
There are two Barber Shops in a town, Hugo's and Hopen's, that are Bertrand competitors. Total weekly demand for haircuts in the town is Q = 120 p. Currently the going price for the haircut is $30 and sadly, Hopen's is always empty. Hugo, the owner of Hugo's is extremely happy with his business, making profits of $1,000 a week in haircuts.What are the marginal costs per haircut for each of these Barbers? ExplainA third company called Quickcuts rents trimming machines that would reduce the marginal costs of these barbers by half. If it offers renting the trimming machine only to Hugo's, how much can it charge for that? What if it offers it to Hopen's only? Show your calculations
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