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Flauer [41]
3 years ago
13

Assume that the labor market for barbers is competitive and that it is differentiated into two groups:

Business
1 answer:
ehidna [41]3 years ago
4 0

Answer and Explanation:

I will go through each and every option explaining the reasons and what option would be the best:

The (a) part says 'difference in wages will eventually disappear since a haircut is a homogeneous good' - This is not true because even though it is an homogeneous product, some customers do have a strong preference for barbers who are not going bald. Therefore, they know their worth and they would want to capitalize on that and get paid just a bit more than bald barbers.

The (b) part says 'barbershops that hire barbers with hair will be able to charge a higher price for a haircut to those consumers who have a strong preference for barbers with hair'. - If the barbershop charges higher price for barbers that have hair then the customers will prefer bald barbers as the questions mentions that there is high competition and since it is an homogeneous, customers would be willing to save money and get their haircut from some other barber.

The (c) part says 'barbershops that hire bald barbers will always be much more profitable' - Not necessarily. The reason is that some customers have a strong preference for barbers who are not bald and therefore, that would help barbershops who have barbers with hair to be a bit more profitable as some additional customers would want their services.

The (d) part says 'barbershops that hire barbers with hair will always be much more profitable' - This is the best option and the reason for it is because some customers have a strong preference for barbers with hair and that would help the barbershop to earn more. They would have the customers who already indifferent to whoever cuts their hair and in addition to that, they would also have the customers who have their preference.

Hence the answer is D.

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Shareholders of public companies need to appoint a board of directors to represent their interests because:_____.
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4 0
2 years ago
The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:
Rainbow [258]

Answer:

d. $75,000

Explanation:

                                total         Los Angeles    Bay Area  Central Valley  

Revenues           $750,000      $200,000     $235,000    $325,000

Variable exp.      $410,000        $110,000      $120,000     $180,000

Controllable       $210,000         $65,000        $75,000      $70,000

<u>fixed expenses                                                                                      </u>

controllable        $130,000        $25,000        $40,000      <u>$75,000</u>

profit margin

Noncontrollable fixed expenses and common fixed expenses are not included in the calculation of individual controllable profit margin.

7 0
3 years ago
In 2016, Raleigh sold 1,000 units at $500 each, and earned net income of $40,000. Variable expenses were $300 per unit, and fixe
labwork [276]

Answer:

1,118 units.

Explanation:

The computation of number of units to be sold is shown below:-

For the Year 2016

Number of Units Sold = 1,000 units

Unit selling price = $500 per unit

Total Sales = $500 × 1,000 = $500,000

Variable Costs = $300 × 1,000

= $300,000

Contribution = $500,000 - $300,000

= $200,000

Fixed Costs = $160,000

Net Income = $200,000 - $160,000

= $40,000

For the Year 2017

Unit Selling Price = $500 per unit

Unit Variable Cost = $300 × 1.10

= $330 per unit

Contribution per unit = $500 - $330 = $170 per unit

Fixed Cost = $160,000 - $10,000 = $150,000

Now, to maintain the same income of $ 40,000 the Company have a total contribution

$150,000 + $40,000

= $190,000

Number of units to be sold = Total contribution ÷ Contribution per unit

= $190,000 ÷ $170

= 1,117.64

or

1,118 units.

4 0
3 years ago
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