Use the Following to Answer Question(s): the Restaurant Model

Multiple Choice

Use the following to answer question(s) : The Restaurant Model

-(Exhibit: The Restaurant Market) The exhibit shows curves facing a typical restaurant in a community.Assume that the market is characterized by many firms, differentiated products, easy entry and easy exit.If the restaurant shown here is typical of others in the community, then in the long-run, prices charged by firms in the market are likely to:

A) fall.
B) rise.
C) remain unchanged.
D) There is not enough information given to answer the question.