In a Monopolistically Competitive Market Like Restaurants, Large Capital-Intensive Firms

In a monopolistically competitive market like restaurants, large capital-intensive firms like McDonald’s may co-exist with more labor-intensive mom-and-pop shops. In this case, higher labor costs would tend to favor the survival of

A) large-scale capital-intensive firms more than the small firms.
B) small firms more than the large-scale capital-intensive firms.
C) foreign firms more than the large-scale capital-intensive firms.
D) domestic restaurant firms more than the foreign firms.

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