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Fast Food Market in Canada Economics

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Fast Food Market in Canada Economics
The Fast Food Market In Canada | | 10/13/2010Table of Contents The Market for Fast Food in Canada 3 Is the Demand for Fast Food Elastic or Inelastic? 5 Influences on Price Elasticity of Demand 7 The Relationship between Price Cuts and Total Revenue 9 Understanding Fast Food Price Cuts 12 Works Cited 15

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The Market for Fast Food in Canada
When examining market structure, one must look at several factors including the quantity of firms, type of products offered, barriers to entry, pricing power and non-price competition. In order to define the fast food market, all of these factors must be considered. Due to competition, price wars, and barriers to entry in the fast food market, market structure becomes slightly muddled and difficult to determine. That being said, the fast food market may not solely be defined by one market structure. It is the combination of two separate market structures, which form the backbone of the fast food industry. These two structures are monopolistic competition and oligopoly.
In the fast food market, the number of producers may be numerous; however, the number of firms may not always be the key point to consider when determining market structure. Instead, it is important to analyze whether there are a few firms that are relatively large and have substantial market share compared to the various others in the industry. In the case of fast food, one could say that there are thousands of fast food chains and restaurants scattered all over Canada and North America as a whole. Despite the large numbers, there are only a select few who dominate the market and produce a majority of the industry’s total output. (AmosWEB). The three prevailing ‘fast food giants’, according to their 2009 annual reports, were McDonald’s, Yum!Brands (Taco Bell, Kentucky Fried Chicken, Pizza Hut), and Wendy’s International. (Wikinvest). Though there are many competitors in the fast food industry, these three companies joined with a few others have a


Cited: "2009 McDonald 's Annual Report." About McDonald 's. Web. 05 Oct. 2010. <http://www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/investor_relations0.Par .17264.File.dat/2009%20AR%20Report%20-%20Print.pdf>. Agarwal, Amit. "Lecture 3: Nash Equilibrium." 02 Aug. 2002. Web. 07 Oct. 2010. <http://www.cse.iitd.ernet.in/~rahul/cs905/lecture3/index.html>. Alva, Marilyn Ayrouth, Elie. "Zesty Mango McMini Sandwich (Canada)." Food Beast. N.p., 9 Sept. 2010. Web. 4 Oct. 2010. <http://foodbeast.com/content/2010/09/09/mcdonalds-zesty-mango-mcmini-sandwich-canada/>. Bora, Madhusmita. "Taco Bell to Debut $2 Combo Meal." Wallet Pop. 14 May 2010. Web. 03 Oct. 2010. <http://www.walletpop.com/blog/2010/05/14/taco-bell-to-debut-2-combo- meal/>. Burkett, Eric. "Like It Fast and Cheap? Price Cuts to Fast Food Menus for 2010." Delish. 28 Dec. 2009. Web. 06 Oct. 2010. <http://www.delish.com/food/recalls-reviews/Like-it-fast- and-cheap>. "(Economics Basics: Elasticity)." Investopedia.com - Your Source For Investing Education. Oct. 2010. Web. 5 Oct. 2010. <http://www.investopedia.com/university/economics/economics4.asp>. "Economics: Explore and Apply." May 2006. Web. 09 Oct. 2010. <http://202.205.89.79/download/materials/2006s/discipline/intro_to_economics/oren/Microeconomics/11.ppt>. "From Basic to Involved Mathematics." Biz/ed. Web. 08 Oct. 2010. <http://www.bized.co.uk/learn/economics/maths/rules.htm>. Glover, Katherine. ""Value Meal" Explosion Squeezes McDonald 's." BNET - The CBS Interactive Business Network. 21 Oct. 2008. Web. 12 Oct. 2010. <http://www.bnet.com/blog/food/value-meal-explosion-squeezes-mcdonalds-other-fast food-eateries/244>. Hemenway, Bradley. "Oligopoly." Richland Community College. July 2009. Web. 09 Oct. 2010. <http://people.richland.edu/bhemenwa/micro_oligopoly.pdf>. "Inelastic Definition." Investopedia.com - Your Source For Investing Education. Web. 5 Oct. 2010. <http://www.investopedia.com/terms/e/inelastic.asp>. "Inferior Good Definition." Investopedia.com - Your Source For Investing Education. Web. 5 Oct. 2010. <http://www.investopedia.com/terms/i/inferior-good.asp>. "Is Government Intervention in the Fast Food Industry Justified? ." Becker-Posner . N.p., 27 July 2008. Web. 5 Oct. 2010. <http://www.becker-posner-blog.com/2008/07/is-government-intervention-in-the-fast food-industry-justified-becker.html>. Jekanowski, Mark D., James K. Binkley, and James Eales. "Convenience, Accessibility, and the Demand for Fast Food." Journal OfAgricultural and Resource Economics (2001): 58-74. Print. "Latest Release from the Labour Force Survey." Statistics Canada. 08 Oct. 2010. Web. 09 Oct. 2010. <http://www.statcan.gc.ca/subjects-sujets/labour-travail/lfs-epa/lfs-epa-eng.htm>. Mangion, Paul. " US Double Dip Recession and What This Could Mean For Canadian Mortgage Rates BharatBhasha.com. 2 Sept. 2010. Web. 12 Oct. 2010. <http://www.bharatbhasha.com/finance-and-business.php/258866>. Maranjian, Selena. "Fast food Price Wars." Motley Fool. N.p., 4 Sept. 2009. Web. 3 Oct. 2010. <http://www.fool.com/investing/value/2008/09/04/fast food-price-wars.aspx>. "McDonald 's (MCD)." Wikinvest. N.p., n.d. Web. 3 Oct. 2010. <http://www.wikinvest.com/stock/McDonald 's_(MCD)>. Moretti, Stefania. "McDonald 's Stirs up Competition for Tim Hortons." Canoe Money. 21 Apr. 2010. Web. 06 Oct. 2010. <http://money.canoe.ca/money/business/canada/archives/2010/04/20100421- 155737.html>. "Oligopoly Characteristics." AmosWEB. WebMaster, n.d. Web. 5 Oct. 2010. <http://www.amosweb.com/cgibin/awb_nav.pl?s=wpd&c=dsp&k=oligopoly,+characteristics>. "Optimizing the Demand Curve with Revenue Management." Revenue Management Solutions. Web. 07 Oct. 2010. <http://www.revenuesolutions.co.za/DemandCurves.htm>. "Product Differentiation." AmosWEB. N.p., n.d. Web. 5 Oct. 2010. Workman, Daniel. "McDonald 's Global Sales Advantages." Suite101. 11 Feb. 2009. Web. 03 Oct. 2010. <http://www.suite101.com/content/mcdonalds-global-sales-advantages-a95598>.
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