1. Business
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  3. 3 consider the advertisement industry where firms use models workers...

Question: 3 consider the advertisement industry where firms use models workers...

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3. Consider the advertisement industry, where firms use models (workers) to shoot adver- tisements. Each model works for only one firm. Each worker (model) comes in with a different hair style, which can be divided into 24 types. In other words, the hair style wheel is like a 24- hour clock. Each firm enters the market and makes one advertisement. Each advertisement has a specific requirement for hair style. If a models hair style does not match the advertisements requirement, the model must spend money redoing the models hair in order to close the gap. The 2 cost of re-styling is S2 for each unit of hair style shift. For example, to go from style #3 to style #2, the cost is $2; to go from style #5 to style #2, the cost is $6. Each advertisement requires two models. There are two cities in the region: Smallville has 4 models and Bigburg has 12. The gross wage for each model is $50 Assume that models are evenly distributed around the hair style wheel. Compute the net wage for models in each of the two cities. Show steps for partial credit. (10 pts)

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