McDonalds Market Structure Essay Examples



structure, consumers, being rational will buy from the cheapest supplier (Samuelson & Marks 216). This strategy will enable them to penetrate the market. The firm will make little profit since it will seek to maximize the units sold since its charges lower prices. The firm will also need to consider its total cost when pricing. However, this strategy will be short lived since other firms in the market will lower their prices as well. Lower average cost The firm will need to maintain its average costs at the minimum to make a profit. Average cost is given by the total costs incurred in the production divided by the units produced. Maximize Total Revenue Total revenue is given by the average...