a. Explain how KFC China has differentiated its menu to compete with other restaurants in terms of quality, variety, and marketing.

b. Predict whether KFC China produces at, above, or below the efficient scale in the short run.

KFC China’s menu has evolved over the years and become highly localized. It contains no “super-size”
items but includes oven-roasted chicken, wraps, and different proteins. In 2002, KFC China started serving breakfast, introducing congee, a breakfast favorite in China, on its menu. Further, to appeal to families, many outlets offer special meals, a play area, and activities for kids while their parents dine.