The paper "Fast Food Services in Australia" Is a great example of a Business Case Study. The fast-food industry mainly serves customers with high energy nutritious and healthy foods. The main products of the industry include chips, burgers, grilled chicken, fried chicken, sandwiches, yogurt, sausage desserts, and confectionaries (Magner, 2015). Market structure In the fast-food industry, there are many competitors that sell the products found in the industry. As a result of a high number of competitors in the market, the competition is quite intense. The products of the competitors in the market are differentiated by quality and barding.
This, therefore, indicates that the market structure is monopolistic. In a monopolistic market structure, the prices of the products of the company are influenced by the intensity of the competition (Taussig, 2013). In the fast-food industry, the prices are usually dependent on the prices that are offered by the competitors. This has made the prices of the products almost similar. There are only a few barriers to the market entry and hence the high number of businesses operating in the industry. The number of producers and consumers is unlimited.
A market that has an unlimited number of producers and consumers is referred to as a perfect market. However, a perfect market only exists theoretically. The market structure in the fast-food industry, therefore, displays monopolistic as well as perfect market structures. The number of restaurants has been increasing over the years and so is the number of consumers. Demand and supply analysis Demand theory One of the conditions that are a determinant of demand in the industry is the need to satisfy the taste of the customers. According to the theory of demand, people demand goods and services for the purposes of satisfying a want (Sloman, Norris & Garrett, 2013).
The need to satisfy certain cravings is a major driver of demand among younger customers. The growth in disposable income is also one of the major drivers of demand in the market. There has been an increase in the amount of disposable income in most households which makes it possible for the people to buy luxurious products. According to the demand theory, the ability of the customers to procure the goods is an important driving force for the demand.
Most of the customers in the industry are the working class. This includes the parents who provide their children the money to purchase the products of the industry. The willingness of the customers is also a determinant of demand in the industry. The industry has increasingly been focusing on the production of healthy food. This has increased the willingness of the customers to consume the products of the industry. A willingness by the customers to purchase the products is an important aspect of the demand theory. Supply theory According to the theory of supply, the cost of production is one of the determinants of supply.
The supply is high when the cost of production is low. However, the supply is low when the cost of production is high. In the industry, the cost of production is relatively low. The main costs in the industry mainly involve labor. The other expenses are relatively low and this favors the supply of the products in the market. According to the supply theory, technology is one of the factors that determine the supply of products.
In the fast-food industry, the frequent changes in the industry do not increase costs in the industry. The fast-food chain like KFC utilizes modern technology for the purposes of increasing its levels of production. This has played an important role in terms of increasing the levels of supply. According to the theory of supply, indirect taxation plays an important role in terms of determining the level s of supply (Rios, McConnell & Brue, 2013). In the fast-food industry, the levels of taxation are quite low and this has contributed to an increase in the levels of supply.
List of References
Magner, L, 2015, IBIS World Industry Report H4512 Fast Food Services In Australia, IBIS World.
Taussig, F, W, 2013, Principles of economics (Vol. 2), Cosimo, Inc..
Sloman, J, Norris, K, & Garrett, D, 2013, Principles of economics, Pearson Higher Education AU.
Rios, M, C, McConnell, C. R, & Brue, S, L, 2013, Economics: Principles, problems, and policies, McGraw-Hill.
Marshall, A, 2009, Principles of economics: unabridged eighth edition, Cosimo, Inc..
Cowen, T, & Tabarrok, A, 2009, Modern principles of economics, Macmillan.