Answer the question on the basis of the following information: Harry owns a barber shop and charges $6 per haircut.By hiring one barber at $10 per hour,the shop can provide 24 haircuts per eight-hour day.By hiring a second barber at the same wage rate,the shop can now provide a total of 42 haircuts per day. Refer to the given information.Harry should:
A) hire the second barber because he will add $28 to profits.
B) hire the second barber because he will add $108 to profits.
C) not hire the second barber because he is less productive than the first barber.
D) not hire the second barber because he will diminish profits.

Question

Quizplus · Accepted Answer

The first barber provides 24 haircuts, generating $144 in revenue (24 x $6) and costing $80 in wages (8 x $10). The second barber adds 18 haircuts, generating $108 in revenue (18 x $6) and costing $80 in wages. The second barber adds $28 to profits ($108 - $80).

Answer the Question on the Basis of the Following Information