Franco the barber charges $15 for a haircut. He has 200 customers who each pay Franco $30 a month. Market demand for Franco's haircuts is

Question

Quizplus · Accepted Answer

Each of Franco's 200 customers gets a haircut once a month, meaning there are 200 haircuts per month. Since Franco charges $15 per haircut, his total monthly revenue from haircuts alone is 200 x $15 = $3,000. However, each customer pays Franco $30 per month, which means his total monthly revenue is also 200 x $30 = $6,000. Therefore, the market demand for Franco's haircuts is 400 per month ($6,000/$15 per haircut).

Franco the Barber Charges $15 for a Haircut