Assumed competitive and the market is in equilibrium

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Suppose the powers-that-be think the llliana Expressway is a good project and they proceed to bulid the section that links up Interstate 355 over by Joliet down to Interstate 65....right by the sleepy hamlet of Lowell, Indiana. Assume that Lowell presently has a number of restaurants, the market is assumed competitive, and the market is in equilibrium. Then, an exit ramp is built off the new llliana Expressway right Into Lowell leading to a flood of drivers exiting the Interstate to grab a bite to cat in Lowell. Anticipate the short-run and long-run impact of this ramp on the market for restaurants in Lowell. What might happen to the price of land, the wage rate, etc? Would It matter if Lowell controlled entry through restaurant licensing?

Reference no: EM131091864

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