In the area around a local university, a number of food vendors gather each lunchtime to sell food to university students who are tired of dorm food. The university and the town have no license fees that apply to food vendors, preferring to let the market dictate how many and which vendors show up. Many different cuisines are represented on the street corner, including a cart sponsored by ABC selling X and Y . ABC sells a plate of either X or for Rs.5. The food is made in the morning at nearby restaurant, when the kitchen is otherwise unoccupied. His crew of three, each of whom earns Rs.15 per hour, takes 2 hours to make the 100 meals required by ABC. In creating these meals, they use ingredients equal to Rs.100. ABC hires another worker to load her cart with food and sell it during the lunch hours. That worker costs Rs.10 per hour and typically sells out the entire cart of 100 meals in 2 hours. The cart is rented for Rs. 100 per 5-day week. What market structure does this business most resemble? What characteristics lead you to this conclusion?
In the area around a local university, a number of food vendors gather each lunchtime to
sell food to university students who are tired of dorm food. The university and the town
have no license fees that apply to food vendors, preferring to let the market dictate how
many and which vendors show up.
Many different cuisines are represented on the street corner, including a cart sponsored
by ABC selling X and Y . ABC sells a plate of either X or for Rs.5. The food is made in
the morning at nearby restaurant, when the kitchen is otherwise unoccupied. His crew of
three, each of whom earns Rs.15 per hour, takes 2 hours to make the 100 meals required
by ABC. In creating these meals, they use ingredients equal to Rs.100. ABC hires another
worker to load her cart with food and sell it during the lunch hours. That worker costs
Rs.10 per hour and typically sells out the entire cart of 100 meals in 2 hours. The cart is
rented for Rs. 100 per 5-day week.
What market structure does this business most resemble? What characteristics lead you to
this conclusion?
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