Applebees Monopolistic Competition

Market anatomical structure influences how an constitution be be possessed ofs check to pricing, supply, barriers to entry, efficiency and arguing. More specifically, Applebees, a nation-wide casual dining restaurant chain, is an organization whose structure is guideed to be monopolistic competition. Monopolistic competition is a structure that has many another(prenominal) buyers and sellers who sell products that be similar but not identical. Hence, preferably of being a price taker, Applebees has a downward incline demand curve.Applebees is almost like a tiny monopoly because of the differentiation in the products that they sell. Moreover, Applebees has some control over their prices but competition tends to dictate the price range for food and beverages. In addition, its comparatively easy to enter and exit this market without restrictions. Chilis, T. G. I. Fridays, Red Lobster, remote Steakhouse, Olive Garden and Ruby Tuesdays are Applebees briny competitors. In graspi ng market share and maximizing profits, announce plays substantive role in monopolistic competition.All of these organizations spend millions of dollars in advertising but why? Plain and simple, advertising leads to higher profits. One of the commercials that have Applebees has is a 550 calorie meal. In todays society, consumer are becoming more health conscientious and showing a scrumptious shrimp and pasta meal for under 550 calories appeals to the consumers eye. Now without that commercial, how many people would actually know about this? Definitely, not as many.In continuing on how advertising plays a hugh role in monopolistic, consider yourself driving down the road with a friend and you want to walkover a bite to eat. Are you more inclined to stop at Applebees, a clean safe and economical eating environment or a place you never even heard of such as Jim Bobs diner with the sign out in take care of the building falling down who has a short order pee that looks like a guy t hat should be in ZZ Top? betting odds are you would be more inclined to stop at the hearty known Applebees because you are familiar with this organization because of advertising.Now that Applebees has you in the door, think of the extra revenue that is accrued from ordering drinks? If a restaurant buys a bottle of vodka for $10 and is able to get 22 drinks out of that bottle for $3/drink that would make a $56 approximate profit. If you continue the math, millions of dollars are made because it started out with advertising. References Applebees. (2010 March). Retrieved March 25, 2010, from Applebees website http//applebees. com