Question

Suppose that the market for haircuts in a community is perfectly competitive and that the market is initially in long-run equilibrium. subsequently, an increase in population increases the demand for haircuts. in the short run, we expect that the typical firm is likely to begin:

Answer 1

The typical firm is like to incur an economic loss in the short run. When there are an increase in the population the demand for haircuts also increase because most of the people will demand to cut their hair specially on summer days. So In the short run, the typical firm will likely to incur economic loss.