Assume that restaurants in aiports rent the space that they occupy and that the restaurant industry is competitive. Keeping in mind the concept of economic rent, we know that food prices will be higher at the airport restaurants than at other locations because: O airport restaurants generate larger economic profits than other restaurants at different locations. O the number of potential customers is greater at the airport locations. O the rent paid by the restaurant is higher than the rent paid at other locations. O demand for food at airports is less elastic than at other locations.

Assume that restaurants in aiports rent the space that they occupy and that the restaurant industry is competitive. Keeping in mind the concept of economic rent, we know that food prices will be higher at the airport restaurants than at other locations because: O airport restaurants generate larger economic profits than other restaurants at different locations. O the number of potential customers is greater at the airport locations. O the rent paid by the restaurant is higher than the rent paid at other locations. O demand for food at airports is less elastic than at other locations.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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