Market for Fast Food and Take away Food Services in Australia

Work Requirement:
The project accounts for 30% of the total assessment for this course and should be no more than
2000 words. Projects exceeding the specified word limit will be penalised by 1 mark for every 100
words exceeding the limit.

Industry report_s2 2019Page 2
B. PROJECT GUIDELINESS
Project Overview
This project provides students with an opportunity to research into life microeconomic aspects of the
market for Fast Food and Takeaway Food Services in Australia.
The aim of the project is to give students an opportunity to apply microeconomic concepts and tools
acquired in class to a practical context.
Project objectives.
This project covers the following course learning outcomes:
1. Identify appropriate foundational microeconomics theories and techniques to apply in the
business environment;
2. Apply the economic method to systematically and rigorously analyse economic phenomena;
3. Analyse microeconomic issues within the frameworks of modern microeconomic models and
analytical techniques to explain and predict the outcomes of changes in a variety of economic
variables;
4. Identify and assess, in a microeconomic framework, the economic issues confronted by individual
decision makers and by society as a whole to guide economic decision making;
5. Analyse and evaluate public policy to determine its economic and societal welfare consequences

C. PROJECT TASK
Scenario
You are a Freelance Economics Consultant who has been commissioned by the Commonwealth
Government to analyse the state of affairs in the Fast Food and Takeaway Food Services in Australia
and report your findings to the Government.
Task
Access the IBIS World report on the industry of Fast Food and Takeaway Food Services in
Australia and answer the questions below, in your own words.
To access the IBIS World Report, go to RMIT’s home page. Then select ‘Library’ and launch
‘Databases A-Z’. After this, select the popular database of ‘IBIS World.’ Once in the database,
search for ‘Fast Food and Takeaway Food Services in Australia.’
You are encouraged to search for other relevant information on the website including:
https://www.abs.gov.au/
http://www.ausfoodnews.com.au/

Industry report_s2 2019Page 3
1. The market
1.1 Define the market. In your answer, you will need to identify the buyers, sellers and the product(s)
exchanged.

(1 mark; maximum 100 words)

1.2 Identify the market structure of fast food and take away food services. Explain how you reached
your decision using economic theory and facts.

(2 marks; maximum 200 words)

2. Analysis of the market
So far, you have examined the industry of Fast Food Services in Australia as a whole. Now consider the
market for traditional fast food in Australia specifically. Traditional Fast Food is defined as takeaway
food including burgers, pizza, chicken, fish and chips, pies, sausage rolls and pastries as opposed to
healthier alternatives.
2.1 Identify and briefly analyse two relevant conditions (determinants) of demand that have prevailed
in this industry in the past five years.

(2 marks; maximum 200 words)
2.2 Identify and briefly analyse two relevant conditions (determinants) of supply that have prevailed
in this industry in the past five years.

(2 marks; maximum 200 words)
2.3 Illustrate the above changes in a demand and supply diagram for the market of cattle milk showing
clearly the impact on the equilibrium price and quantity.

(1 mark)

2.4 Elasticity
2.4.1 Using economic theory and facts discuss and explain the probable price sensitivity of traditional
fast food.

(2 marks; maximum 100 words)
2.4.2 Would a significant rise in the price of home-cooked meal replacements offered by supermarkets
have any impact on traditional fast food? Explain.

(2 marks; maximum 100 words)

2.5 Government intervention.
2.5.1 Outline the existing level of government intervention in the whole industry of fast food services in
Australia based on the information available. Give two examples of government intervention in
the market for fast foods.

(2 marks; maximum 100 words)

Industry report_s2 2019Page 4
2.5.2 Analyse the impact the level of government intervention is having on the industry. Consider both
the firm and the consumer perspectives.

(2 marks; maximum 100 words)

3.0 Further Analysis of the Market – Externalities
In your opinion, explain whether you believe there is any type of externality present in the market for
traditional fast food. If an externality is present, describe what action is available to the government in
order to eliminate the externality. Illustrate both situations using two graphs – one showing the
unregulated market and the other showing the government intervention.

(4 marks; maximum 400 words)

4. Analysis of the future market
4.1 Given the current trends, how is the demand for traditional fast food likely to change in the next five
years? Explain.

(2 marks; maximum 100 words)
4.2 Given your answer in 4.1 what would you, as an Economics’ Consultant, recommend to businesses
in traditional fast food?

(2 marks; maximum 100 words)
So far, you have examined the industry from the perspective of traditional fast foods in Australia.
Consider now the Market for ‘healthier’ fast foods in Australia specifically. Healthier fast foods are
defined as fast foods with less fat, sugar and salt including foods such as sushi, salad, yoghurt, wraps,
sandwiches and fruit.
4.3 How is demand and supply of healthier fast foods likely to change in the next 5 years? In your
answer, briefly discuss two relevant conditions (determinants) of demand and two relevant
conditions (determinants) of supply.

(3 marks; maximum 300 words)
4.4 Illustrate the above changes in a demand and supply diagram showing clearly the impact on the
equilibrium price and quantity.

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