Concept explainers
An increase in the market price of market price of men's haircuts, from $15 per haircuts to $25 per haircut, initially causes a local barbershop to have its employee work overtime to increase the number of daily haircuts provided from 35 to 45. When the $25 market price remains unchanged for several weeks and all other things remain equal as well, the barbershop hires additional employees and provides 65 haircuts per day. What is the short-run price elasticity of supply? What is the long-run price elasticity of supply?
Concept introduction:
Price elasticity of Supply
Price elasticity of supply measures how much the supply for the commodity changes with one unit change in the price of the commodity
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Mylab Economics With Pearson Etext -- Access Card -- For Economics Today: The Micro View
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