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.

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Definitions:

Abraham Maslow

An American psychologist known for creating Maslow's hierarchy of needs, a theory in psychology proposing that certain fundamental needs must be satisfied before higher needs can be pursued.

Drive Theories

Theories in psychology that explain motivation as being driven by biological needs that demand satisfaction.

Approach Theories

A set of theories in psychology that focus on the motivations driving individuals towards certain behaviors or goals.

Empirical Evidence

Information acquired by observation or experimentation that is used to confirm or disprove a hypothesis or theory.