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 substitutes.
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 production.

Question

Quizplus · Accepted Answer

Safeway has a monopoly at midnight because it is the only supermarket that remains open. However, during the day, it faces competition from Whole Foods and Lunardi's, so it does not have a complete monopoly.

In Walnut Creek, California, There Are Three Very Popular Supermarkets