Ari owns a hair salon in a small city. Which of the following is NOT an effect that the opening of new hair salons in her city will have on her salon?
A)Its profit will decrease.
B)It will have less market power.
C)The quantity it sells will decrease.
D)Its cost curves will shift upward.

Question

Quizplus · Accepted Answer

The opening of new hair salons in the city may lead to more competition and lower prices for haircuts, which could lead to a decrease in profits and market power and a decrease in the quantity sold. However, it should not directly cause a shift in cost curves upward.

Ari Owns a Hair Salon in a Small City