Scale Economies and Diseconomies at McDonalds: How does having a menu
that is uniform around the...

Question

Scale Economies and Diseconomies at McDonalds: How does having a menu 
that is uniform around the country provide McDonald’s with economies of 
scale? How is menu planning made more complex by expanding into other 
countries?
 Scale Economies and Diseconomies at the Movies: Movie theater 
concession sales account for well over half the profits at most 
theaters. Given this, what are the benefits of the staggered movie times
 allowed by multiple screens? What is the benefit to a multiscreen 
theater of locating at a shopping mall?

David · Accepted Answer

McDonalds: 
Answer: 
Economies of scale refer to the decline in the long run average cost due to the increase the plant size ( or 
due to increase in the scale of production) . In other words, economy of scale arises when total production 
changes by more proportion in response to change in the scale of production. Having a menu that is 
uniform around the country provide McDonald’s with economies of scale because having a uniform menu 
allow McDonald’s make the production at large scale which results in various form of cost and operating 
advantage for the McDonalds. These advantages are: (1) with increase in plant size, both capital and 
operating cost decline as the production is done at big scale (2) plants gain efficiency as with large size,

Scale Economies and Diseconomies at McDonalds: How does having a menu that is uniform around the country provide McDonald’s with economies of scale? How is menu planning made more complex by expanding...

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