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Harry Owns a Barbershop and Charges $6 Per Haircut

Question 214

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Harry owns a barbershop 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. 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.

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