There are four consumers willing to pay the following amounts for haircuts: Jerry: $7 Oprah: $2 Ellen:

Question:

There are four consumers willing to pay the following amounts for haircuts:

Jerry: $7

Oprah: $2

Ellen: $8

Phil: $5

There are four haircutting businesses with the following costs:

Firm A: $3

Firm B: $6

Firm C: $4

Firm D: $2

Each firm has the capacity to produce only one haircut. For efficiency, how many haircuts should be given? Which businesses should cut hair and which consumers should have their hair cut? How large is the maximum possible total surplus?


Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

Question Posted: