Fast Food

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 market to offer lower quality goods to the consumers.   To maximize the contribution margin of each consumable, companies must produce for the lowest price and sell for the highest.   The selling price is basically preset by a silent agreement among large corporations,...