BUS530 MOD 3 SLP: Market Structure and Game Theory

Trident University International Name Market Structure and Game Theory BUS530 MOD 3 SLP Date InstructorDate 1. What market structure is there for this line of business in your home town? Is this a monopoly, oligopoly, monopolistic competition, or perfect competition? Justify your answer using both your own research on this type of business in your home town, and by referencing some of the required background readings on different The fast-food restaurant industry sells to different market targets, and the markets are divided into the burgers & sandwiches, pizzas/pasta, snack fried chicken, seafood and others such as ethnic foods. A fast-food restaurant is a form of monopolistic competition structure, where there are many businesses each of which has various fast food products and beverages that differ from that of the others. Thus, multiple businesses have some power to set prices. Monopolistic competition is an imperfect type of competition where there шы a high number of sellers in the market that have a certain power to influence the cost of their product. This differentiation of food products allows these restaurants to enjoy a certain market power in relation to their products, and have influence setting their prices. The nationally known fast food restraint outlets and franchises exercise more power because of their brand name, product offerings, price, variety of products, and location. McDonald’s Corporation remains the biggest players in the fast-food industry nationally and the state (QSR, 2019). Despite various restaurants operating, few businesses have higher power than the rest, and sometimes, this may seem more of an oligopolistic market than one of monopolistic competition. This is the case of the fast-food, which despite having the characteristics of a monopolistic competition market, in the burger market, it is led by (McDonald’s, Wendy's and Burger King). The fast-food industry has many sellers and buyers and the firms tend to sell at a low price to be competitive, and the products are differentiated. When one can access capital there is easy entry and exit of the market. The food products also differ in quality and product offerings to guarantee that each restaurant exercises certain market power by modifying prices, without having the dominant power in the market. 2. Now that you have examined market structure of your chosen industry in your home town, do some research on IBIS World on market structure in this industry nationwide. You can access IBIS World by going to the main TLC Portal and clicking on “Additional Library Resources”. A link to IBIS World will come up. This direct link might also work if you are already logged onto the Trident online library. What information could you find regarding how concentrated or how competitive this industry is? There are well known national brands in the fast-food industry that also serve international markets, but they do not sell similar products, and there are restaurants that operate in only limited locations. Thus, the market is concentrated in some areas and segments such as McDonald’s Happy Meal, which targets children and the company is the dominant player. However, for other segments, there is greater competition, and this shows the indus...