Which of the Following Offers the Best Reason Why Restaurants

question 26

Multiple Choice

Which of the following offers the best reason why restaurants are not considered to be perfectly competitive firms?

• A)Restaurants do not sell identical products.
• B)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.
• C)Restaurants usually have entry barriers in the form of zoning restrictions and health regulations.
• D)Restaurants have significant liability costs that perfectly competitive firms do not have; for example, customers may sue if they suffer from food poisoning.

---

Definitions:

Economic Systems

Organized ways societies distribute resources, produce goods and services, and allocate them among their populations.

Native Americans

The Indigenous peoples of the United States, including a vast number of tribes, cultures, and languages that existed in America before European colonization.

White Settlement

The establishment of communities in a new area by white people, often in regions previously or concurrently inhabited by Indigenous peoples or other ethnic groups.

Crop-Lien System

A form of credit extended to farmers, typically those who grew cotton, where future crops were used as collateral for loans to purchase supplies and land.