In 2011, Red Robin announced that it would open 12 fast-casual restaurants, and in 2016 the company decided to abandon the fast-casual restaurant business. Which of the following reasons relating to the characteristics of monopolistic competition did the
company give for getting out of the fast-casual restaurant business?
A) Barriers to entry were too high.
B) The restaurants were not differentiated enough from their full-service restaurants.
C) There were very few buyers and sellers in the market.
D) Standardized pricing in the industry gave them no potential to earn a profit.
Answer: B
You might also like to view...
Differences in human capital and discrimination can help explain economic inequality
Indicate whether the statement is true or false
Which factor would facilitate tacit collusion among firms in a market?
a. an increase in the number of firms. b. a decrease in the probability the market will continue into future periods. c. a decrease in the interest rate. d. none of these.
You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. Your roommate still enjoys Ramen noodles very much and buys even more, but you plan to buy fewer Ramen noodles in favor of foods you prefer more. When looking at income elasticity of demand for Ramen noodles, yours would
a. be negative and your roommate's would be positive. b. be positive and your roommate's would be negative. c. be zero and your roommate's would approach infinity. d. approach infinity and your roommate's would be zero.
The monopolist and the perfect competitor are similar in that
A. both operate at peak efficiency. B. both can make a profit in the long run. C. both types of markets have no barriers to entry. D. both try to maximize profits.