A large city has nearly 500 restaurants, with new ones entering regularly as the population grows. The city decides to limit the number of restaurant licenses to 500. Which characteristics of this market are consistent with perfect competition and which are not? Is this restaurant market likely to be nearly competitive? Explain your answer. Which of the following characteristics are consistent with perfect competition? (Check all that apply.) A. A limited number of restaurant licenses. B. A market with 500 restaurants. C. A growing population. D. New restaurants regularly entering. E. An active city government.

A large city has nearly 500 restaurants, with new ones entering regularly as the population grows. The city decides to limit the number of restaurant licenses to 500. Which characteristics of this market are consistent with perfect competition and which are not? Is this restaurant market likely to be nearly competitive? Explain your answer. Which of the following characteristics are consistent with perfect competition? (Check all that apply.) A. A limited number of restaurant licenses. B. A market with 500 restaurants. C. A growing population. D. New restaurants regularly entering. E. An active city government.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section13.2: Profit Maximization And The Competitive Firm's Supply Curve

Problem 2QQ: How does a competitive firm determine its profit-maximizing level of output? Explain. When does a...

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