8. Problems and Applications Q8 There are four consumers willing to pay the following amounts for haircuts, and there are four haircutting businesses with the following costs: Consumers' Willingness to Pay Charles: $50 Gilberto: $35 Juanita: $25 Dina: $40 Firms' Costs Firm A: $25 Firm B: $40 Firm C: $30 Firm D: $45 Each firm has the capacity to produce only one haircut. For efficiency, should be given. Which businesses should cut hair

For efficiency 1 hair cut should be given.

Firm A should cut hair, because the marginal cost is lower than the willingness to pay.

Explanation:

Given Data:

Consumers' Willingness to Pay,

Charles: $50

Gilberto: $35

Juanita: $25

Dina: $40

Marginal cost,

Firm A: $25

Firm B: $40

Firm C: $30

Firm D: $45

The marginal willingness to pay is higher than the marginal cost till the first haircut. So, for efficiency, 1 haircuts should be given.

Firm A should cut hair, because the marginal cost is lower than the willingness to pay.

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.