Answer to Question #54511 in Economics of Enterprise for ashu

Question

McDonald’s restaurants do the bulk of their business at lunchtime, but have found that promotionally-priced meals at breakfast and dinner make a significant profit contribution. Does the success of McDonald’s restaurants in this regard reflect an effective application of the marginal profit concept or the incremental profit concep

Answer 1

In this case McDonald`s implement incremental profit concept, which allows to use promotional-priced meals to increase profit contribution. Additionally sold breakfast and dinner actually provides company wit additional (incremental) profit