McDonald’s is a chain of restaurants whose corporation was initially founded in the year 1940. Their initial success lay not just in the low price of the foods offered which initially consisted of hamburgers, French fries, chicken, and multiple other categories, but in the quick delivery of the product to consumers and the franchising that was introduced when businessman Ray Kroc took over in the late 1950’s. Their signature product, the Big Mac, is a hamburger consisting of two beef patties weighing just over 45g each, American cheese, lettuce, onions, pickles and a variation of Thousand Island dressing known as special sauce. It is often utilized to symbolize the capitalist economy of the American culture, and is priced at approximately $3.99 depending on an additional fee from a meal order (Covert, 2015). The price of any product is weighted against the ratio of supply and demand in addition to the cost of creating the product for sales (Frank et al, 2017). Given the fact that McDonald’s is one of the largest restaurant chains in the continental United States, there is clearly no issue with the former stipulation.

However, in the event that production costs were to increase, from either a lack of sales, greater supplier fees, or greater employee wages, the price of the Big Mac for consumer purchase would scale up, leading to a reduction in consumer interest. I, for example, love the product. Despite this, I would not pay for the same product if the price were to increase by 25 percent. In a situation where the minimum wage were to be increased to $15 an hour as campaigned by politicians such as Bernie Sanders, it is estimated that prices across all fast food restaurant products would increase by just over 4 percent, which would mean that the sandwich now costs nearly 17 cents higher, or $4.16 before sales tax (Covert, 2015).

Another way of compensating for higher employee wage costs includes alteration of size. For the case of the Big Mac, an exceptionally large food product, it could shrink anywhere between 10 to 70 percent (Frank et al, 2017). In the event that minimum wage were increased to an exceptionally generous margin of $22 per hour, economists predict that the cost of the Big Mac would increase by 25 percent, amounting to nearly a dollar more in cost to $4.99 (Covert, 2015). Given that this is closer to the cost of not only the burger but also the meal with a complimentary drink, I would no longer be interested in paying for it, and sales would plummet. However, the studies do not take into account savings generated from higher wages nor any costs related to employee turnover. McDonald’s and many other major distributors have retaliated against raising the minimum wage by threatening to replace their entire base of laborers with automated machines that would require exponentially less costs, no overtime fees, and significantly lower upkeep.

If they were to implement this plan which would prove disastrous to workers, then the cost of the Big Mac could scale down by 25 percent or lower, reducing the price from $3.99 to as miniscule as $2.99 (Frank et al, 2017). Despite the setback to one’s health, the amount of calories provided by a Big Mac is enough to feed the body for 2.5 meals, making it a far better purchasing alternative for those that struggle with money. I myself would also be more inclined to purchase the product, and given these results, profits would skyrocket for the company. As a result of the price fluctuations, one could easily make the assertion that demand for this product is elastic, as such factors indeed have a significant effect on the amount that consumers desire to buy (Amadeo, 2017).