Answer :
Final answer:
McDonald's benefits from the decrease in potato prices by purchasing commodity products at lower rates, enabling promotions such as 'Free Fries on Friday' and demonstrating the impact of agricultural economics and market behavior during a supply surplus.
Explanation:
The potatoes McDonald's purchases during the scenario where supply outstrips demand due to plummeting restaurant demand are considered commodity products. These are basic goods that are typically uniform in quality and produced in large quantities by many different producers. The fall in potato prices benefits McDonald's, as it relies heavily on this raw material for its french fries, a menu staple. McDonald's can capitalize on this excess supply and lower prices by running promotions such as 'Free Fries on Friday' to attract customers, potentially increasing sales of other menu items.
The pandemic-induced scenario highlights the dynamics of supply and demand, as well as how large buyers can gain an advantage during times of surplus, showcasing a side of agricultural economics and market behavior. Additionally, it reflects the broader concepts of food processing and the impact of government policies on food product prices, which can shift consumer choices toward more processed and less healthy options.