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ECO404 - Managerial Economics GDB No. 2 Solution Fall 2015 Due Date January 26, 2016
|Starting Date||Friday, January 22, 2016|
|Closing Date||Tuesday, January 26, 2016|
|Question Title||Market Structures|
Lahore is second largest city in Pakistan and often referred to as the cultural heart of Pakistan. The city is famous about variety of restaurants from local to international food. There is enormous attractive and tempting variety of restaurants in Lahore with diversified cuisine within all kinds of budgets. People from all over Pakistan and living abroad also wish to come back to Lahore and explore the new restaurants. Lahoris have a zeal and passion for food famous all over Pakistan. So keeping in view the demand side and handsome profits, restaurant business is quickly spreading in market.
Being the student of managerial economics, you are required to explain that in which category of market structure restaurants fall, also explain would you expect the market demand curve for restaurants to be more or less elastic in the long run after competitor’s entry has eliminated economic profits?
Its Monopolistic competition.