Question

What would you expect to happen to the relative proportion of big chain restaurants in a...

What would you expect to happen to the relative proportion of big chain restaurants in a town that lowered its minimum wage? Will the proportion change due to exits or entrances? Which type of restaurant will see more in the way of exits or entrances? Why?

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Answer #1

It can be mentioned that is the minimum wage decreases in the cost decreases as a result of which small chain restaurants can get to pop out into the industry with which the proportion of big chain restaurants can get to decrease initially if the small chain restaurants can identify the actual flavour of the locality and pose a strong competition to the big change industry and due to exit and entrances, proportion changes and big chain restaurant can see more exit than entrances because ultimately due to the penetration pricing and differentiated product policies the small chain restaurants can get to serve as a result of which these entrances.

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