The Golden Arches Analyzing A Global Monopoly Analysis
The Golden Arches: Analyzing a Global Monopoly Using Adam Smith’s The Wealth of Nations
When most individuals hear about a “McDonald’s Monopoly,” they think of the popular game that the fast food chain advertises on certain menu items, increasing its sales by offering prizes, both monetary and otherwise, to its customers. However, the chain is also an economic monopoly in that it dominates the marketplace as the premier fast food restaurant around the globe. In 2017, the company reported that sales in franchises open for at least one year rose by 4.1% (Taylor). On McDonald’s Corporation website, the company touts its locations in 101 different countries. This proves perhaps more than anything that the world is, in fact, “lovin’ it.” Adam Smith provides us with a relatively clear opinion on monopolization. He says in his work, The Wealth of Nations, that, “The price of monopolization is upon every occasion the highest which can be got” (Smith). He explains that the natural price for an item, or in other words, the actual cost that it takes to make the product itself, is significantly lower in the instance of a monopoly. Conversely, the price that the buyer pays is much higher due to a lack of competition. Smith also goes on to assert that large businesses or corporations are monopolies …show more content…
While large corporations are assuredly a sign of a monopoly at least in some right, an economist would be remiss if they would not also pay heed to the idea of degrees of competition. Despite McDonald’s degree of specialization with copyrighted menu items (which can form a relative monopoly), a dissatisfied customer has the ability to take their business elsewhere to a comparable restaurant. With similar prices and menu items, most fast food chains provide a fairly equal chance at getting a quick, inexpensive
When most individuals hear about a “McDonald’s Monopoly,” they think of the popular game that the fast food chain advertises on certain menu items, increasing its sales by offering prizes, both monetary and otherwise, to its customers. However, the chain is also an economic monopoly in that it dominates the marketplace as the premier fast food restaurant around the globe. In 2017, the company reported that sales in franchises open for at least one year rose by 4.1% (Taylor). On McDonald’s Corporation website, the company touts its locations in 101 different countries. This proves perhaps more than anything that the world is, in fact, “lovin’ it.” Adam Smith provides us with a relatively clear opinion on monopolization. He says in his work, The Wealth of Nations, that, “The price of monopolization is upon every occasion the highest which can be got” (Smith). He explains that the natural price for an item, or in other words, the actual cost that it takes to make the product itself, is significantly lower in the instance of a monopoly. Conversely, the price that the buyer pays is much higher due to a lack of competition. Smith also goes on to assert that large businesses or corporations are monopolies …show more content…
While large corporations are assuredly a sign of a monopoly at least in some right, an economist would be remiss if they would not also pay heed to the idea of degrees of competition. Despite McDonald’s degree of specialization with copyrighted menu items (which can form a relative monopoly), a dissatisfied customer has the ability to take their business elsewhere to a comparable restaurant. With similar prices and menu items, most fast food chains provide a fairly equal chance at getting a quick, inexpensive