Is McDonald’s a Monopoly?

A firm is said to be a monopoly if it is the only sole vendor of its item and its item doesn’t have any close substitutes, for instance, McDonald’s. The factors like government license, ownership of resources, copyright and patent, and high starting cost makes McDonald a solitary dealer of goods. Every one of these factors limit the passage of the other sellers onto this market. It also possesses some information that is not known to other sellers.

McDonald’s is a commonly used example of monopolistic competition. Monopolistic competition signifies the variety in the products available in the market. Though they have similar products they are yet different from each other in various aspects. McDonald’s have divided them products in different varieties and have many outlets and dine ins too. There are many other similar ones in the competition like KFC, Subway, Burger King etc. All of these are a similar kind of food chain and serve fast food itself yet their very basics are differently structured.

This makes the entity the single seller in the market controller as well as the price maker. They maximize their profit by deciding the price of the product that is to be sold and by determining the quantity of the equivalent. Also, McDonald’s charge different prices from different customers for the same product called ‘Price discrimination’ as this entity aims for profit maximization. 

A very significant quality of McDonald’s is the fact that wherever they put up an outlet they always go with the native cuisine and have so many options. People love their menu because of their varieties without posing a close substitute from other entities. McDonald’s has made use of non-price competition for their growth too. Though they have similar products they are yet different from each other in various aspects.

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