the city of Zurich currently uses zoning laws to restrict number of pizzerias. under a proposed law, the restrictions on pizzerias would be eliminated. Consider the following statement by an expert in pizza industry:"A pizzeria reaches the horizontal portion of it's long-run average cost curve at an output of 1,000 pizzas per day. The city's existing pizzeria sells 3,000 pizzas per day. Based in these facts, I predict that if the city eliminates restrictions on pizzerias, we will soon have three pizzerias(3,000 pizzas/1,000 pizzas per pizzerias).if we assume that the expert's facts about prouction costs are correct, is the expert's conclusion of three pizzerias correct? |
