The Oldest Hamburger Chain in the United States Is White

question 3

Essay

The oldest hamburger chain in the United States is White Castle, which was founded in 1921. Most of their restaurants in the early days were located in urban areas. In the 1950s they lost much of their business to McDonalds and Burger King. They were slow to respond in building restaurants on highways and in suburbs. How did the advent of the highway system in the 1950s alter residential location patterns and how might this have affected the marginal revenue product of burger chains in both urban and suburban areas. Why did sales drop off in the urban areas where White Castle had earned its initial success?

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Average Cost Curve

A graphical representation that illustrates the cost per unit of output at different levels of production.

Long-run

A period in economics where all factors of production can be varied, and there are no fixed inputs, allowing full adjustment to changes.