How would you characterize the nature of competition in the restaurant industry? Are there submarkets with distinct competitive pressures? Are there important substitutes that constrain pricing? Given these competitive issues, how can a restaurant be profitable?

In the market for little nourishment makers, there is tremendous rivalry with all makers selling substitute merchandise. All the makers are selling practically comparative merchandise at practically comparable costs, which makes rivalry extreme and the best way to expand benefits is a touch of promoting to a great extent, that too at ostensible expenses on the grounds that an expansion in these expenses would straightforwardly influence benefits.   Truly, there are sub markets with particular serious weights in light of the fact that the great market is an exceptionally wide market and in this manner there are sub markets in it like a natural nourishment advertise, bundled nourishment showcase and so on.   Indeed, there are many close substitutes which increment rivalry and compel valuing. For example there are numerous comparable contenders like Kellogg's and Jimmy senior member selling the best-solidified nourishment in the US at comparative costs.   A natural solidified nourishment maker can be beneficial in light of the fact that the market for natural solidified nourishment is new and undiscovered with an extremely modest number of makers selling nourishment. The maker right now be beneficial by selling its items at significant expenses on the grounds that the opposition is less and request is moderately inelastic.

Externalities or spillover occurs when some of the benefits or the costs of production are not fully reflected in market demand or supply schedules.