Question

which situation is the best example of competition in an economic system?
a restaurant just opened down the block from a movie theater, and the restaurant owner hopes to attract diners after each movie.
a small cd store slashed its prices to attract customers from a larger store that sells cds and dvds.
a store that sells sneakers has offered a special deal to customers from a nearby health club.
a federal agency has been created to monitor the production and distribution of food supplements.

Explanation:

Competition in an economic system involves businesses vying for the same customers. In option B, the small CD store and the larger store (which also sells CDs) are in direct competition. The small store's price - slashing is a competitive strategy to gain customers from the larger store. Option A is more about complementary businesses (restaurant and movie - theater, where the restaurant hopes to get customers after the movie, but not direct competition). Option C is a targeted marketing (to health - club customers) rather than competition. Option D is about government regulation (monitoring food - supplements) not competition.

Answer:

B. A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs.