Final answer:
The failure rate for restaurants being higher than that of other small businesses is true because due to factors like high competition, and sensitivity to market conditions and economic downturns.
Step-by-step explanation:
The statement that the failure rate for restaurants is higher than for other types of small businesses can be considered true. Restaurants and small retailers indeed experienced steep drops in revenue during the pandemic, which was an unprecedented period of economic stress. However, the restaurant industry has historically had a high failure rate compared to other businesses even before the pandemic.
This is influenced by factors such as high competition, high operating costs, and customer demand that can be very sensitive to economic downturns. Conditions of demand and supply in the market can shift unexpectedly, resulting in challenges such as rising input prices or falling output prices. The need for a market-oriented system to provide flexibility in satisfying customers, keeping costs low, and innovating also contributes to business failures, and restaurants are particularly vulnerable to these market shifts.