It's not just jacking up prices; it's about keeping competition down to reasonable levels. If you have the world's best restaurant that everyone needs to eat at, then great; but most restaurants are going to be in the middling end of the scale, where they're vulnerable to having "too much" competition. If you serve decent Mexican food, then your revenue will be damaged by every "decent Mexican place" that opens in your vicinity.
Don't get me wrong; there's plenty of room for "decent Mexican places," but if too many of them open, then they might all end up with not enough customers to survive. Limiting the number of restaurants means that there will be enough customers for most of them.
Don't get me wrong; there's plenty of room for "decent Mexican places," but if too many of them open, then they might all end up with not enough customers to survive. Limiting the number of restaurants means that there will be enough customers for most of them.