The Fast-Food Industry Is Not Considered Perfectly Competitive Because

question 228

Multiple Choice

The fast-food industry is not considered perfectly competitive because

• A) entry and exit are strictly regulated by the government.
• B) the firm's products are not homogeneous.
• C) there is a small number of dominant firms.
• D) there is a very large number of firms.

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Definitions:

High Start-Up Costs

The significant initial investment required to establish a new business, which can include expenses related to research and development, manufacturing, marketing, and administrative infrastructure.

Few Competitors

A market condition where only a small number of firms operate, often leading to higher prices and reduced competition.

Oligopoly

Market structure in which relatively few sellers compete and high start-up costs form barriers to keep out new competitors.

Planned Economy

Economic system in which government controls determine business ownership, profits, and resource allocation to accomplish government goals rather than those set by individual firms.