A small city has a number of hot dog stands operating throughout the CBD area. Suppose that each vendor has a marginal cost of R1,50 per hot dog sold and no fixed cost. Suppose the maximum number of hot dogs that any one vendor can sell is 100 per day.

If the vendor market is perfectly competitive, will the price remain R2 for a hot dog?

[1] Yes, remain at current price of R 2,00

[2] No, change to R 1,00

[3] No, change to R1,50

[4] No, change to R2,50