Competition Vs. Monopoly Essay -- essays research papers

1. Analyze the fast food assiduity from the point of view of ideal competition. Include the concepts of snap bean, utility, costs, and market structure to explain the prices charged by fast food retailers.Firms within the fast food industry fall under the market structure of perfect 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, well-fixed entry 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.Competition within the industry as well as market supply and petition conditions set the price of products sold. For example, when Wendys introduced its $.99 value menu, several other companies implemented the same 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 lower prices of items on their menu, in order to maintain their share of the market.The previous 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 must accept the prices established by the consumer demand for the value menu. If consumers didnt respond so positively to Wendy...