Mr. Lim is the manager of a restaurant in the Seattle area. As he understands it, the market for restaurants (specifically, for his type of restaurant) is perfectly competitive. It is announced that the Seattle Supersonics, the beloved basketball franchise, shall be returning to Seattle area for the beginning of the 2016-2017 season. Mr. Lim is aware that this will increase the market demand for restaurants.

a. Explain what will happen in both the short-run and long-run.

b. As Mr. Lim was one of the owners of the restaurants in Seattle, how could he take advantage of this situation?

a. The arrival of Seattle Supersonics for the beginning of the 2016-17 season is supposed to increase the market demand for restaurants. Therefore, in the short run, the demand for restaurants will increase. This will include Mr. Lim's restaurant too. However, after the basketball season is over, the demand will go back to its original state and Mr. Lim would require other strategies, in the long run, to draw more crowd to his restaurant.

b. One sure shot way through which Mr. Lim could take advantage of this situation is by requesting one of the team members of the Seattle Supersonics to be the face for his restaurant promotion. Since the team is pretty popular among the Seattle public, they will consider visiting Mr. Lim's restaurant more often. He could also invite the team to visit his restaurant from time to time to garner greater attention from fans and the public.