A Restaurant Setting Up Shop in a New City Wants

question 39

Multiple Choice

A restaurant setting up shop in a new city wants to obtain fresh produce directly from the farms around the city.Though buying directly from the farms is often more expensive than buying from their suppliers,the restaurant's negotiators are confident of securing a mutually acceptable price list.Which of the following situations will most likely promote the development of integrative agreements?

• A) The restaurant wants to ensure that it gets a variety of produce.
• B) Established restaurants also obtain supplies from the farmers.
• C) The farmers expect that it will be a long-term relationship.
• D) The restaurant wants to balance the price and quality of produce.

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Definitions:

Long Run

A time period in economic theory during which all factors of production and costs are variable, allowing for full adjustment to changes.

MR

Marginal Revenue refers to the increase in revenue that results from the sale of one additional unit of output.

Industry Entry

The process by which new competitors enter an existing market or industry.

Continue Operate

The decision for a business to keep running its operations despite facing challenges or not achieving expected results.