To discuss:
Answer to Problem 6R
Local restaurants do not usually require any specific working skills or experience therefore there are large number of employees for the job.
Explanation of Solution
It is absolutely correct to say that a local fast-food restaurant manager experiences almost perfect competition in the demand for high- school employee labor. Obviously, the manager and the restaurant is benefitted by it.
The reason to this situation is due to the fact that the local restaurants do not usually require any specific working skills or experience. They do not require any qualification. They are amongst the easiest jobs that are available in the market especially for high school students. The high-school students do not demand high wages as for those students a small restaurant job is just a means to meet out their day-to-day expenses. The restaurant manager will face a situation where there are a huge number of employees available for the job and the demand for high wages is also less. At the same time the work will be done properly because it is an easy job and not special trainings and skills need to be provided to the employees before they start working. The employees do not need any pre-requisite skills. Therefore, managers for fast food restaurants face perfect competition in their demand for high school student employees.
Introduction: Perfect competition is defined as the market structure where there are huge number of buyers and sellers in the market and produce homogeneous products; thus, no firm has enough capability to control the industry.
Chapter 9 Solutions
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