Economic concepts related to Mc Donald's
1. Law of demand- demand for fast food items like burgers are always high among customers. When demand of the particular burger increases, McDonald's reduces the price.
2. Economies of scope- when McDonald's increases the production capacity of burgers, the average cost of production increases. Hence it makes a reduction in prices of items.
3. Law of diminishing marginal utilities- mc Donald's offers meals of 700, 500 etc which is a combo of burgers, fries, cold drinks. Since they know that utilities will diminish over time, they offer combo meals.
4.Price discrimination- McDonald's offers different price slabs for different types of customers. There are pocket friendly packs of 100- 150 as well as high price meals ranging around 500-600.
5. Incentives for the customers- McDonald's offers special offers like free softies, french fries and ice creams for customers in order to increase demand. These incentives offered to customers are determinants of demand of products offered by McDonald's.
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