Which of the following offers the best reason why restaurants are not considered to be perfectly competitive firms?
A) Restaurants compete in small market areas—neighborhoods and cities—rather than in regional or national markets. Therefore, restaurants are not small relative to their market size.
B) Restaurants usually have entry barriers in the form of zoning restrictions and health regulations.
C) Restaurants do not sell identical products.
D) Restaurants have significant liability costs that perfectly competitive firms do not have; for example, customers may sue if they suffer from food poisoning.
C
You might also like to view...
Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of
A. $10.
B. $90.
C. $100.
D. $1,000.
The historical data on velocity shows that velocity for
a. M1 has fallen since 1929 and has become more stable since 1981. b. M1 has risen since 1949 and has become more volatile since 1981. c. both M1 and M2 have increased since 1949 but have become more stable since 1979. d. both M1 and M2 have declined since 1949.
Velocity can be computed with the formula
a. (Annual spending)/(Money supply). b. (Annual income)/(Annual spending). c. (Average income)/(Average spending). d. (Money supply)/(Average income).
Which of the following is a possible outcome of austerity policies?
A. Decrease in economic activity B. Increase in employment opportunities C. Decrease in budget deficits D. Increase in tax revenues