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?
The new restaurant will charge higher prices than Antonio's because they need to pay off new business loans.
Both restaurants will increase their prices to make up for the customers who chose to visit the competing restaurant.
Customers will benefit from better products and lower prices as the restaurants complete for their business.
Antonio's will stop spending on advertising or offering coupons to customers to protect their profits.
