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Market Structure and Pricing Power
Faith Kelly
ECO/561
November 14, 2016
Susan McMaster
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Market Structure and Pricing Power
There are many different types of market structures in today’s society, perfect
competition, monopolistic competition, oligopoly, and monopoly. A very popular fast-food
chain, McDonald’s, has a monopolistic competition market structure. “Monopolistic competition
emerges as a market structure determined by consumers’ heterogeneous tastes and firms’ fixed
requirements for limited productive resources” (Ottaviano & Thisse, 2011).
While McDonald’s is a monopolistic competition, the following will is discussed;
determining the elasticity of demand, how pricing relates to an elasticity of demand, McDonald’s
marginal cost, marginal revenue, and market share as production volume rises, and changes in
pricing strategy.
