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Homework answers / question archive / a)When a drought hits a country, and a famine is possible, what probably falls more: the demand for food or the demand for haircuts? Why? b)Who probably suffers more from a deep drought: people who own farms or people who own barbershops?
a)When a drought hits a country, and a famine is possible, what probably falls more: the demand for food or the demand for haircuts? Why?
b)Who probably suffers more from a deep drought: people who own farms or people who own barbershops?
a. When there is a drought, there is a large drop in income. The demand for food is less elastic than the demand for haircuts, for the simple reason that human can survive without haircuts, but not without food. Therefore, the demand for haircuts will fall more than the demand for food.
b. Since the demand for haircut will fall more in a recession, the people who own barbershops will suffer more in this case, as they will lose more in terms of the customers, which reduce their income.
