Suppose that Devon’s landlord starts charging a $5 fee for each haircut Devon provides, and that nothing else changes.

a. Make a table showing Devon’s new marginal cost for each of the first 4 haircuts. You can determine Devon’s original marginal cost for each haircut by looking at the height of his supply curve in Figure 4.3.

b. Make a table showing Devon’s new supply schedule; include quantities for each of the prices listed in Table 4.1.

c. Draw Devon’s original supply curve and his new supply curve after he must pay his landlord $5 per haircut.

In Table 4.1

Price or cost (per haircut) $70 60 50 40 30 20 10 0 Net gain 1 Net loss 2 Supply and marginal cost 3 Price 4 Quantity (haircuts per day) Anderson, Survey of Economics, 2019 Worth Publishers FIGURE 4.3 Supply and Marginal Cost: How a Firm Determines How Much to Produce