The oldest hamburger chain in the United States is White Castle, ...

[lilldybug07]

The oldest hamburger chain in the United States is White Castle, which was founded in 1921 . Most of their restaurants in the early days were located in urban areas. In the 1950s they lost much of their business to McDonalds and Burger King.
 
  They were slow to respond in building restaurants on highways and in suburbs. How did the advent of the highway system in the 1950s alter residential location patterns and how might this have affected the marginal revenue product of burger chains in both urban and suburban areas. Why did sales drop off in the urban areas where White Castle had earned its initial success?

Question 2

Many cities in California have severe land-use laws and ordinances, which effectively takeoff the market large amounts of land for residential or commercial construction.
 
  If the demand for housing increases in these cities without any increase in the stock of housing or commercial buildings then what is the likely impact that this will have on home prices and commercial structures? How might this affect where corporations choose to locate factories?

Question 3

What does it mean for a good to have a demand-determined price?
 
  What will be an ideal response?

[johnharpe]

Answer to Question 1

The advent of the highway system in the 1950s meant that larger numbers of people lived in residential areas located in the suburbs. That put White Castle in direct competition with fast-food chains like McDonalds and Burger King, which had located on highways and in suburban areas. Previously it wouldn't have made sense for White Castle to locate in the suburbs since there were few customers if any living there. Likewise, because of the large migration of people from the inner city to the suburbs White Castle's former customer base was being eroded.

Answer to Question 2

Prices for homes and commercial structures are likely to rise. This may have the effect of forcing corporations to build factories in the suburbs where land-use restrictions are more lax.

Answer to Question 3

A demand determined price occurs when a good is fixed in supply. In this case, the price is determined exclusively by the amount that firms and households are willing to pay for the good.