In Walnut Creek, California, there are three very popular supermarkets: Safeway, Whole Foods and Lunardi's. While Safeway remains open twenty-four hours a day, Whole Foods and Lunardi's close at 9 pm. Which of the following statements is true?

A) Safeway is a monopoly all day because it produces a service that has no close

B) Safeway has a monopoly at midnight but not during the day.

C) Safeway can ignore the pricing decisions of the other two supermarkets.

D) Safeway probably has a higher markup to compensate for its higher cost of substitutes. production

Question

Roxie

Business

26 August, 09:40

In Walnut Creek, California, there are three very popular supermarkets: Safeway, Whole Foods and Lunardi's. While Safeway remains open twenty-four hours a day, Whole Foods and Lunardi's close at 9 pm. Which of the following statements is true?

A) Safeway is a monopoly all day because it produces a service that has no close

B) Safeway has a monopoly at midnight but not during the day.

C) Safeway can ignore the pricing decisions of the other two supermarkets.

D) Safeway probably has a higher markup to compensate for its higher cost of substitutes. production

+4

Answers (1)

Know the Answer?

Burns · Answer 1

The correct answer is option B.

Explanation:

There are three very popular supermarkets. Among them, two close at 9 p. m, while Safeway remains open 24 hours a day. Since at midnight Safeway is the only accessible supermarket and there are no close substitutes available, we can say that Safeway has a monopoly at midnight.

Though it does not have a monopoly during the day as there are other supermarkets providing closer substitutes.