Business, 21.12.2019 03:31 lauriepdx

Assume that the labor market for barbers is competitive and that it is differentiated into two groups:
barbers who are bald (or going bald) and those who have a full head of hair.
assume that the barbers in this market have identical hair-cutting ability, regardless of whether they are bald or not. currently the equilibrium wage in the bald barber market is lower than that in the nonbald market. further assume that the market for haircuts is competitive.
1. if some consumers in the market for haircuts have a strong preference for having their hair cut by a barber who is not going bald, then:
a. the difference in wages will eventually disappear since a haircut is a homogeneous good.
b. 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.
c. barbershops that hire bald barbers will always be much more profitable.
d. barbershops that hire barbers with hair will always be much more profitable.

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Answer from: mcampos49

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.

Answer from: Quest

There is a button above my comment that says mark brainlest or something like that

Answer from: Quest

Some disadvantages to leasing a car is that you are counting on someone to give you money every week or month depending on what you decided and if they don't have all of it well what if you needed that money now you as well have to pay not in full. a disadvantages to purchasing a new vehicle is if it is used then not all the time will absolutely everything work. its almost like a trail and era. although if it is a new car they will try to though all these specials and deals at you in your lease and it can be very overwhelming if you are not use to it.

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