There are many things that could affect the supply and demand for these services. People’s income is a huge factor. When the economy is down and people are making less money or don’t have jobs, the “extras” like highlights and hairstyles are going to be less in demand. The tastes and preferences of customers is another thing that impacts the demand for services (Supply and Demand).Almost 50 percent of workers are self-employed and salons average about 150 weekly visits (Beauty Salons).

This is why the hair salon industry is an example of monopolistic competition. There are salons all over the place and they each offer services that can be differentiated. Market strategies for hair salons focus on service differentiation (Hair Care). Some salons offer walk in services with no frills for a low price while others offer appointment only luxury services at a higher price point. The success of the salon’s service options relies on the demographics of the area as well as on the competition. If most salons in the area offer luxury services you might have more success offering value based services.