Barber Licensing. Consider the market for haircuts in a city. In the market equilibrium, the price per haircut is $6 and the quantity is 240 haircuts per day. For consumers, each $1 increase in price...

Barber Licensing. Consider the market for haircuts in a city. In the market equilibrium, the price per haircut is $6 and the quantity is 240 haircuts per day. For consumers, each $1 increase in price decreases the quantity demanded by 20 haircuts. For producers, each $1 increase in price increases the quantity supplied by 60 haircuts. In the market equilibrium, there are 24 barbers, each of whom produces 10 haircuts per day. Suppose the city passes a law requiring all barbers to have a license and then issues only 18 barber licenses. Each licensed barber continues to provide 10 haircuts per day. Use a completely labeled graph to show the effects of licensing on (a) the price of haircuts and (b) the total surplus in the haircut market.