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Unisex International Haircutters, Inc., face the following demand function for haircuts per day:
QD = 240 - 20P
(a) Draw a figure showing the demand curve and the corresponding marginal revenue curve of the firm. On the same figure draw typical MC, ATC, and AVC curves showing that the best level of output is 80 haircuts per day, and that ATC = $10 and AVC = $6 at Q = 80. (b) How much profit or loss per haircut does the firm have? Does the firm remain in business in the short run? Why?
a) How much profit or loss does the firm have?
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