Think back to the example in the warm-up: a business owner wants to open a restaurant, but many residents do not want a business that is open late at night near their homes.

how are local governments structured to solve a local issue like this one?

Local governments address this concern from residents by having property zoning laws.

Zoning laws refers to a mandate given by the government regarding how a certain set of land can be used. The regulations regarding the usage usually depended on the people near it. If the people collect enough petitions to protest the business, the government  representatives would feel pressured to restrict the business.

i honestly have no idea