Pricing Lobster in my Boston Restaurant(Please read this article:The mistery of the market Price):

a.Is the end of the sixth paragraph an example of short-run pricing or long-run pricing? That is, by charging higher prices, should this restaurant expect other restaurants to enter immediately (say this lobster season)?

a. Long-run. Not immediately.

b. Short-run. Not immediately.

c. None of the above.

The price of lobster, like the price of anything else, is set in a market. But the market price you pay is fundamentally a price determined by the restaurant market,notthe market for lobsters. And the issue is a basic one of capacity and competition.

Think back to the Fisherman's Friend and its excellent location. Stonington is a great place to visit. But it's also a very small town. There aren't very many places to eat. And if it's a certain kind of coastal Maine seafood dinner experience you're after, there aren'tanyother places in town to go. There's a little reason to fear losing customers to the boil-at-home option as lobster prices fall but no reason to worry about a nearly identical competitor next door poaching your customers. Nor is there a nearly identical competitor next door whose customers you might hope to poach with a discount.