Fast Food Profit

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Fast Food Profit

The American economy relies upon competitive exchange: a process where opposition within a market creates standards for quality and price valuation. To insure the quality of American products the US government encourages a competitive market and enforces regulations. "Capitalism is a system of private ownership of capital that relies on market forces to govern the distribution of goods" (Goldstein 533). In an ideal capital market companies will produce their product to meet consumer tastes, government regulations, and beat similar competitive products. As a capitalist rule: the more competition that enters the market, the better the quality and prices. However, even though there are many fast food restaurants, the industry is able to act in a monopolistic manner. First, they are able to set the market price and have it remain relatively constant without competitive interference with respect to bid wars. Second, the clientele may choose other fast food restaurants based on personal tastes, but are locked into the market based on speed and price. Third, besides the regulations from the FDA, businesses attempt to offer the best taste, which does not always have to correspond with quality. The fast food industry has become overflowing with new business competiting for the large fast food clientele. The companies realize the significant profit losses created by an all out bid war, so each company implicitly understands its position and market offering with respect to its competition. The silent agreement hurts consumers because they could be receiving a better price. A majority of people eats fast food because they need the food quickly and/or cheaply. The constant and loyal demand allows the mark...

... middle of paper ...

...iencies, paying employees minimally, and lowering the cost of ingredients.

Works Cited

Franz, Neil. Taco Recall Prompts Aventis to Halt Sales of StarLink Corn.  Chemical Week Oct. 2000. 12 Apr. 2002 Web Page .

Goldstein, Joshua. International Relations. 4th edition. New York: Longman, 2001.

Horngren, Charles, Gary Sundem, and William Stratton. Introduction to Management Accounting. 12th edition. New Jersey: Prentice Hall, 2002.

Ross, Stephen, Randolph Westerfield, and Bradford Jordan. Fundamentals of Corporate Finance. 5th edition. Boston: Irwin McGraw-Hill, 2000.

Schlosser, Eric. The Flavor Counts.  Choices: The Magazine of Food, Farm and Resource Issues Wntr. 2001. 12 Apr. 2002 Web Page .

Tevis, Cheryl. The Secret Ingredients of Our Industrial Food Menu.  Successful Farming Mar. 2001. 12 Apr. 2002 Web Page .

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