The Restaurant Industry

Paper Summary:

This paper considers the different options available when trying to place the restaurant industry into a market structure. It discusses various structure,s including oligopoly, monopoly, and perfect competition, before using statistics from several sources to show that the industry falls under the monopolistic competition category. The paper also touches on the influence that macroeconomics has on the market structure of the industry.

From the Paper:

"The dollar figures alone are impressive, and point to the fact that, no matter how each player in the industry operates, or what regional or local preferences the companies consider in their march to profits, the major economic forces point to competitive monopoly structure. The industry is expected to top $577 billion in sales in 2010. Today, consumers spend 44 percent of every food dollar on beverages, snacks and meals purchases already prepared by a food-service organization; by 2010, the association predicts that the figure will be 53 percent of every food dollar, essentially claiming that restaurants will replace supermarkets as the prime source of U.S. nutrition, and that certainly points to the probability that the industry is, indeed, one operated as a competitive monopoly."

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