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8. Problems and Applications Q8 There are four consumers willing to pay the following amounts for haircuts, and there are four haircutting businesses with the following costs: Consumers' Willingness to Pay Larry:$35 Felix:$50 Janet:$45 Megan:$20 Firms' Costs Firm A:$30 Firm B:$15 Firm C:$35 Firm D:$20 Each firm has the capacity to produce only one haircut. For efficiency, should be given. Which businesses should cut hair

Respuesta :

Answer: For efficiency, (3) haircut should be given.

Explanation:

For efficiency, (3) haircut should be given. These are Firm A, Firm B, Firm C. Firm D isn't efficient as the consumers willingness to pay is thesame as the firms cost.

The business that should cut hair are therefore:

Firm A

Firm B and

Firm C.

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