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Homework answers / question archive / A barber currently cuts hair for 50 clients per week and earns a profit
A barber currently cuts hair for 50 clients per week and earns a profit. He is considering expanding his operation in order to serve more clients. Should he expand?
a) Yes, because cutting hair is profitable,
b) No, because he may not be able to sell more services,
c) It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients,
d) It depends on the average cost of serving more clients and the average revenue he will earn from serving more clients.
The correct answer is (c).