The Unisex International Haircutters, Inc., faces the following demand function for haircuts per day: QD = 240 – 20P
A. Draw a figure showing the demand curve and the corresponding marginal revenue curve of the firm. On the same figure draw a typical MC, ATC, and AVC curve showing that the best level of output is 80 haircuts per day, and that ATC = $10 and AVC = $6 at Q = 80.
B. How much profit or loss per haircut does the firm have? Does the firm remain in business in the short run? Why?
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