Related to the Economics in Practice on page 199: Licenses to sell hot dogs in New York City's Central Park are considerably higher than the licenses to sell hot dogs in the rest of the city. Which of the following statements regarding the above information is true?
A) Despite this, hot dogs are less expensive in New York's Central Park than in the rest of the city.
B) Despite this, hot dogs sell for the same price in New York's Central Park as they do in the rest of the city because the hot dog market is perfectly competitive.
C) Despite this, hot dogs sell for the same price in New York's Central Park as they do in the rest of the city because the city regulates the price of hot dogs.
D) Due to this, hot dogs are more expensive in New York's Central Park than in the rest of the city.

Question

Quizplus · Accepted Answer

Licenses to sell hot dogs in New York City's Central Park are considerably higher than the licenses to sell hot dogs in the rest of the city, which causes hot dogs to be more expensive in Central Park than in the rest of the city. This is because vendors in Central Park face higher costs to operate, and in order to cover their costs and make a profit, they must charge higher prices for their hot dogs.

Related to the Economics in Practice on Page 199: Licenses