April 27, 2009
Principles of Economics
Paper - The USAs Fast Food Industry
Fast food restaurants intend one of the largest segments of the food industry with over 200,000 restaurants and $120 jillion in sales in the U.S. alone. Fast food restaurants, besides known as quick service restaurants, are far-famed for their short food preparation time. Some of the largest players in this family include international giants like McDonalds and Yum! Brands, national chains such as Wendys and Burger King and regional players like Jack In The Box and Sonic. Firms within the luxuriant food industry fall out under the merchandise social organisation of perfective competition. Market structure is a classification system for the key traits of a market. The characteristics of perfect competition include: large number of buyers and sellers, easy launching to and exit from the market, homogeneous products, and the firm is the price taker. Many fast food franchises fit all or most of these characteristics. rivalry within the industry as well as market supply and command conditions set the price of products sold. For example, when Wendys introduced its $.99 value menu, some(prenominal) other companies implemented the comparable type of changes to their menu.
The demand for items on Wendys value menu was so high because they were offering the same products as always, but at a discounted price. This change in market demand basically forced Wendys competition to begin prices of items on their menu, in order to maintain their share of the market. The former example illustrates the elasticity of the fast food industry. Supply and demand set the equilibrium price for goods offered by franchises within the industry. Competitors of Wendys moldiness accept the prices established by the consumer demand for the value menu. If consumers didnt suffice so positively to Wendys changes, other firms...
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