The folowing diagram shows the curves for perceived demand, marginal revenue, and cost for Manuela's Pizza, which serves Mexican-style pizza. Manuela's is one ofmany other fast food restaurants in this town.MCPriceand CostATCDemandQuantityof piezasWhich statement describes the transibon to the long nun? Select the best answer.O More fast food restaurants will enter the market, and Manuela's demand curve will become more elastic.Manuela's will raise its prices since there is a large demand for its pizzas.O More fast food restaurants will enter the market, and Manuela's demand curve will become more inelastic.Manuela's will experience lower costs of production because it will expand its output.

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More fast food restaurants will enter the market, and Manuela's demand curve will become more inelastic.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 13P

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Question

The folowing diagram shows the curves for perceived demand, marginal revenue, and cost for Manuela's Pizza, which serves Mexican-style pizza. Manuela's is one of
many other fast food restaurants in this town.
MC
Price
and Cost
ATC
Demand
Quantity
of piezas
Which statement describes the transibon to the long nun? Select the best answer.
O More fast food restaurants will enter the market, and Manuela's demand curve will become more elastic.
Manuela's will raise its prices since there is a large demand for its pizzas.
O More fast food restaurants will enter the market, and Manuela's demand curve will become more inelastic.
Manuela's will experience lower costs of production because it will expand its output.

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