When operating a large company such as McDonald's there are many factors to consider that affect your ability to provide sufficient product and service to your consumer. Many of us do no see the economics behind the decision making it takes to ensure goods and services meet our standards when we choose fast food products and services.
Unless a firm is responsive to the demand of the consumer, they will go out of business. Decisions on pricing, quantity and service are directly related to consumer demand. If you cannot satisfy your customer expectations your demand drops which then affects current price. Other determinants that affect the demand for a products include consumer preference, income, price of related goods, expectation of future prices, incomes or availability and population.
Prices directly affect supply availability, if the price is low consumers tend to buy but it may cost the supplier more to produce, whereas if the price is high the suppliers are able to produce enough with spending too much. Supply of products are affected by the determinants of supply which include price of resources, business taxes, technology, price of substitutes in production, future expectation of suppliers and supplies.
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