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Which of the following best explains why an increase in the minimum wage is more problematic for mom and pop restaurants than for big chain restaurants?
A) Chain restaurants are exempt from minimum wage laws.
B) Mom and pop restaurants have more difficulty attracting workers when wages rise.
C) Mom and pop restaurants are more dependent on labor relative to chain restaurants.
D) Chain restaurants have more monopoly pricing power and can more easily raise prices than mom and pop stores.
Minimum Wage
The lowest legal wage that employers are allowed to pay their workers, designed to protect labourers from exploitation.
Mom And Pop
Small, family-owned, and operated businesses, typically offering personalized service.
Chain Restaurants
Restaurants that are part of a brand or franchise, featuring standardized menu items and decor, and operated by a single company or franchisees across multiple locations.
- Comprehend the influence of labor expenses on the competitive dynamics between major and minor enterprises in markets characterized by monopolistic competition.
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Learning Objectives
- Comprehend the influence of labor expenses on the competitive dynamics between major and minor enterprises in markets characterized by monopolistic competition.
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