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Seinfeld Economics: The Cafe (Babu's Restaurant)

by Linda Ghent

Monopolistic competition is a market with a large number of firms selling similar but differentiated products with no significant barriers to entry.

Product differentiation is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This may involve product characteristics, services, or location.

Free entry is a term used by economists to describe a condition in which can sellers freely enter the market for an economic good by establishing production and beginning to sell the product. Along these same lines, free exit occurs when a firm can exit the market without limit when economic losses are being incurred.

Seinfeld: The Cafe (Babu's Restaurant)

Jerry convinces Babu to serve Pakistani food—he'll be the only Pakistani restaurant in the neighborhood. Babu tells Jerry that the restaurant is failing and that Jerry is a very bad man. Babu's restaurant then closes. Jerry blames it on a bad location.

from Seinfeld, Season 3 (1991)
Creator: Larry David & Jerry Seinfeld
Posted by Linda Ghent
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