People appeared to be staying away from shops and restaurants, choosing instead to stock up with daily essentials and remain at home.
Ali Mottaghi, a barber in downtown Tehran, said business had collapsed, with just three or four customers a day.
"Some people don't go to the barbers because they are worried about hygiene, because this is a public saloon and they are afraid that someone here might have the virus, or maybe the barber himself has the virus," he said.
Sohrab Mosalla, manager of a confectionery store, stood in the middle of his empty shop and said people appeared to be panicking.
Iran has the world's highest death toll from the virus outside of China, with 54 deaths from a reported 978 cases.
The virus has struck at least seven government officials in Iran, including one of its vice presidents and the deputy health minister.
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