Chic-Fil-A: Ethical Issues In Business

Microeconomic Issues – Question 2 – Ethical Issues in Business Unfortunately, today’s business world is full of companies making unethical decisions or sparking controversy by taking publicly announcing their stance on specific moral or religious issues. One recent specific example that made quite a splash in the national media as well as in the stomachs of the public involved the popular fast-food chain Chic-fil-A. This past summer, Chic-fil-A’s COO Dan Cathy publicly affirmed his opposition to gay marriage. As expected, the restaurant immediately endured a negative backlash from the public and journalists across the country. The debate had been started. At first many consumers protested and boycotted the chain while business partners
The expected kneejerk reaction would have seen a drop in demand due to the public’s negative change in taste of the restaurant, which is a determinant of demand (Stone, 2008, p. 56). This would have shifted the demand curve to the left while the supply curve did not move. This would yield a decrease in equilibrium price as well as the equilibrium quantity. However, the large counter-boycott measures created the opposite result. A majority of the consumers’ tastes and preferences for Chic-fil-A turned out to be positive, while other constants remained the same otherwise known as ceteris paribus (Stone, 2008, p. 53). The public’s increase in their willingness and ability to buy the food in question in turn increased demand, shifting the demand curve to the right. This increased both the equilibrium price and equilibrium quantity. As the effects of both Cathy’s comments and the feelings of boycotters and counter-boycotters alike dissipate, the equilibriums are expected to fall back to their original values as demand once again levels out. Because of this, Chic-fil-A doesn’t increase their prices in order to match the higher demand. During the past year, the