Market research finds that nearly 80 percent of vehicle owners purchase tires at the business that performs routine maintenance on their vehicles. Increasingly, new car dealers carry tires and sell to car owners who bring their vehicles to the dealer for maintenance. Many car manufacturers negotiate prices on replacement tires and sell through to their dealers. The growing incidence of new car dealers selling replacement tires spiked up in the aftermath of the Great Recession, as new car dealers looked for ways to boost franchise sales in the face of low levels of new car sales. Given that Bresnahan and Reiss's paper was published more than 25 years ago, local tire markets are ________.

Question

Quizplus · Accepted Answer

The passage suggests that the entry of new car dealers into the tire market, a development that occurred after the publication of Bresnahan and Reiss's paper, has likely increased competition in local tire markets. This is because more businesses (new car dealers) are now selling tires, which typically increases competition.

Market Research Finds That Nearly 80 Percent of Vehicle Owners