Q5

Fast food has evolved into a convenient option for today's consumers. McDonald's is a well-known multinational fast food firm that operates under monopolistic competition. Monopolistic competition means an imperfectly competitive market with both monopoly and perfect competition characteristics. Organizations have complete freedom to enter and leave the market, and any business's choices will have no bearing on the intentions of its competitors. Furthermore, McDonald's should not restrict their production because having numerous rivals in the fast-food franchises, like KFC, Burger King, Subway, etc. Even though it is highly competitive, each company has a monopoly on its exceptional product. For instance, some guests prefer McDonald's over Subway or select Pizza Hut instead of Dominos. These various choices offer market power to monopolistic competitive enterprises, which they could utilize to generate optimistic economic benefits.

Monopolistic competition is an industry feature in which several businesses offer products similar to competitors but not identical. Every firm has different approaches to differentiate goods through special labelling, quality, advertising, brand names, etc. For example, McDonald's Happy Meal has become children's childhood globally since 1979. It includes limited toys, fries, and a burger with an exquisite box. Other fast-food restaurants have introduced gifts in their children's menus; however, Happy Meal is the most ubiquitous and long-lasting (McCarthy, 2016). McDonald's is regarded as monopolistic since it establishes its prices based on cost and without any perfect replacement. Whereas McDonald's creates their goods, companies must remain to compete on pricing with businesses that manufacture similar products.

Monopolistic competition firms apply non-price competition to recruit clients. McDonald's utilizes unique tactics to persuade buyers to purchase a specific brand. For instance, McDonald's has provided a more drive-through to improve service within and out of the shop. Moreover, it could also enhance production and attract more customers if promoting mesmerizing advertisements and promotions. Publications, social media, posters are some categories of ads. There was a commercial called "Wi-Fry," a Wi-Fi motif aligned with French fries (Schneider, 2012). Finally, McDonald's has increased output by designing a technique to produce food faster and at a lower cost, it is "Speedee Service System" (Wilson, 2020). This invention reduced the average cost of production while increasing output thanks to the machines they deployed.