Question

Antonio's is the only restaurant in town that serves Italian food. A new Italian restaurant opens down the street from Antonio's. In a market economy, what is the most likely effect of a competing restaurant opening in the neighborhood?
   A:The new restaurant will charge higher prices than Antonio's because they need to pay off new business loans.
B:Both restaurants will increase their prices to make up for the customers who chose to visit the competing restaurant.
  C:Customers will benefit from better products and lower prices as the restaurants complete for their business.
 D: Antonio's will stop spending on advertising or offering coupons to customers to protect their profits.

Answer 1

Answer C: Customers will benefit from better products and lower prices as the restaurants compete for their business.

The most likely effect of a competing restaurant opening in the neighborhood is C. Since there are now two restaurants in town to choose from, customers can choose the better product offered, and at the same time, the lower price.

Answer 2

Yes C is right thank you