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Eco101 Introduction To Microeconomics

KFC is an American fast food chain that specializes in fried chicken. It was founded in the 1930s in Kentucky and now has over 22,000 locations globally. The document discusses KFC's output and costs in the short run when capital is fixed and labor varies. It shows that marginal product and total product initially increase with additional labor but eventually diminish due to the law of diminishing returns. The document also discusses how the COVID-19 pandemic decreased both the demand and supply for KFC due to factors like loss of income, health concerns, and restrictions on imports/exports. Finally, it states that the price elasticity of demand for KFC is inelastic.

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Rtr. Aurin Kabir
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178 views

Eco101 Introduction To Microeconomics

KFC is an American fast food chain that specializes in fried chicken. It was founded in the 1930s in Kentucky and now has over 22,000 locations globally. The document discusses KFC's output and costs in the short run when capital is fixed and labor varies. It shows that marginal product and total product initially increase with additional labor but eventually diminish due to the law of diminishing returns. The document also discusses how the COVID-19 pandemic decreased both the demand and supply for KFC due to factors like loss of income, health concerns, and restrictions on imports/exports. Finally, it states that the price elasticity of demand for KFC is inelastic.

Uploaded by

Rtr. Aurin Kabir
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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•Done by:

• Abdullah Al Shafi
Eco101
• Aurin Ferdousi Kabir
Introduction to • Munira Chowdhury
Microeconomics • Shamsun Nahar Jarin
• Sazzad Halim Shoibal
Introduction of KFC
• KFC (Kentucky Fried Chicken) is an American fast food restaurant chain
headquartered in Louisville, Kentucky, that specializes in fried chicken. It is
the world's second-largest restaurant chain (as measured by sales) after
McDonald's, with 22,621 locations globally in 150 countries as of December
2019.
• KFC was founded by Colonel Harland Sanders (1890–1980), an entrepreneur
who began selling fried chicken from his roadside restaurant in Corbin,
Kentucky, during the Great Depression.
• By 1994 KFC had 5,149 outlets in the US and 9,407 overall, with over
100,000 employees. In August 1997, PepsiCo spun off its restaurants division
as a public company valued at US$4.5 billion (around US$7.3 billion in 2020).
Output and Cost

Figure 1: Total product of labour with a fixed amount of capital Figure 2: Marginal product of labour with a fixed
amount of capital
Every firm’s objective is to maximize profit.

The short run is a time frame whereby fixed output is there in one or more resource. The productivity
in the short run shown the branches of KFC where affect the cost changes in resources which are the
capital and employing labour.

Output and If employee becomes more productive, then production increases for any given amount of cost as
shown in Figure 1.

Costs Task specialization helps to raise productivity, as evidenced by the increasing marginal product for
employees, but until it reached a certain level, it start diminishes as in Figure 2.

The relationship represented in Figure 1 and Figure 2 is known as the law of diminishing returns. When
the capital (factor of production) is fixed, the increase of labour in production process can abuse an
underutilized resource. Hence, the marginal product increases. When over-resource happens with too
much labour, there is no more capital to utilize. The marginal product starts decreasing in result. This is
the point where the law of diminishing returns occurs.
Demand of KFC

Decrease in demand is caused by:


• Fall in people’s income. As because in pandemic
everyone started to lose their job which affected
their incomes.
• In pandemic, most doctor suggested to opt for
healthier alternative as because when getting a
delivery of Fast-food restaurant. There is a chance
of getting contamination of Covid virus.
Fig:3 Decrease in Demand
Supply of KFC

Decrease in supply is caused by:


• Import and export restriction was
mostly happening due to pandemic. As
most countries were imposing
lockdown there were restriction in both
imports and exports
• Quantity supplied decreased due to
high production costs
Fig 4: Decrease in Supply
Elasticity of KFC

• The price elasticity of demand is a units-free quantity of the


responsiveness of the quantity demanded to a change in its
price.
• The demand of KFC is inelastic due to the declining of
demand curve. Societies would rather go for comparable
product selling for a lower price than buying a luxurious one.
• Besides that, there are lots of substitutions within the fast-
food industry.
• Some people would go somewhere where his or her need is
fulfilled with the least amount of cost incurred.
THANK YOU

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