Question

The University of California at Irvine (UCI) allows student organizations and private firms to sell items on campus to raise funds for various activities. Many of the organizations sell boba, a Taiwanese tea drink, because boba is popular with students. The market for boba on the UCI campus is very competitive. If legislation is passed to restrict the entry of private firms into the boba market at the UCI campus, the:_________.

a. demand for boba would increase.
b. demand for boba would fall.
c. market would become more competitive.
d. supply for boba would increase.
e. market would become less competitive.

Answer 1

I think e is the answer.

Answer 2

e.

Step-by-step explanation:

Based on the scenario being described within the question it can be said that if this legislation were to pass the the market would become less competitive. This is because existing firms will ultimately create a monopoly which will control all the product. This will lead to them being able to set the prices that they wish in order to maximize profit since they have no competition to worry about.