Firm McDonald Case

The aim of this assignment is to firstly look at the products that MacDonald franchise

produces. I will also discuss some of the factors that will change the demand for these products.

I will also look at how the quantity demand will change and also look at some of the things that

will affect the changes in supply.

McDonald's restaurants offer a substantially uniform menu, common in the usual fast foods.

This includes hamburgers, cheeseburgers, chicken sandwiches, French fries, salads, milk shakes,

desserts, and ice cream sundaes. The company’s top sellers, and can also be considered as

innovative ones, include the Big Mac, Quarter Pounder with Cheese, the Filet-O-Fish and

Chicken McNuggets.

Some of the factors that would affect the demand for McDonalds as listed in the book Economics by Mc Connell Brue are:

Tastes:

This factor mainly focuses on consumer preferences. In the fast food market, we can see a neck-to-neck competition. A slight change in consumer tastes can result in a drastic change in the quantity demanded of McDonald’s products. For example if the consumer are shifting more towards organic products or are becoming weight conscious, they won’t demand for McDonalds products more. This will result in the decrease in demand for McDonalds.

Number of Buyers:

This is an obvious factor that if the number of buyers for McDonalds product will increase, the total demand will also increase. Similarly if there is a place where population is decreasing, this will eventually decrease the number of buyers for McDonalds as well decreasing the demand overall.

Income:

Income is a very important factor while measuring the change in demand for any product be it a necessity or a luxury. If there is an increase in income of a certain consumer, he will tend to spend more. So, if the income increases, demand for McDonalds increases because income provides the purchasing power.

Price of Substitutes:

Substitutes are those products that can be used as an alternative of McDonalds. In the fast food market, there is a competition between KFC, Burger King and McDonalds. If all of a sudden, KFC introduces a deal which is cheaper in comparison; this will draw the consumers to buy more of that deal because they’ll be getting the same product in lesser amount paid. Therefore, McDonalds should watch for every move made by the competitors.

Consumer Expectations:

This is more related to perception