Oahu to get 6 new Taco Del Mar Eateries by Spring

A new chain of restaurants that serves tacos is opening up here in Hawaii, the firm called Taco Del Mar is opening a total of nineteen restaurants. This year two other firms have also came into the market here in Hawaii they are Wahoo’s and Moe’s. All of these firms are in the so-called “Fresh-Mexican” (Mexi-Fresh) market, which is a sophisticated new market for Mexican food that excludes Taco Bell. Each firm offers similar products but tries to differentiate its self, for instance Maui Tacos uses Hawaiian ingredients and Hawaiian sounding names. Taco Del Mar differentiates itself by serving in a style similar to Subway whereas the other firm’s cook their food in a kitchen. This will have many implications on the Mexi-fresh Industry.All of these factors will affect the Mexi-Freh market in Hawaii in two ways because of one reason, the number of firms in the market with a close substitute product. One factor that will be affected will be the elasticity of demand of the entire market, making the entire market more sensitive to change in price. Before the new restaurants came into the “Mexi-Fresh” market, Maui Tacos was the only firm in the market making it a monopoly, which has a relatively inelastic demand curve. According to the Law of Elasticity of Demand the more elastic a product is the more sensitive it is to a change in price, which means that if you change the price a little then there will be a greater affect on demand, and the demand curve will become more horizontal or elastic. According to the news article all three of the new firms coming into the market provide close substitutes to Maui Tacos product, which will in turn greatly increase the elasticity of demand. There is also another factor that will affect price and it is supply. As the number of firms in the industry increases the supply for “Mexi-Fresh” products will also increase. This will cause the market price to decrease and the quantity demanded to increase. Since the elasticity of demand has increased so much, it will be difficult for individual firms to raise the price of their product because it will cause the quantity demanded to decrease greatly.Since Taco Del Mar’s main goal is to maximize profit, they will try to decrease the elasticity for their individual demand curve. Once they open up they will try to distinguish their self from the other firm’s in the industry, Taco Del Mar will do this by advertising. They will also distinguish them selves by marketing the style that they serve. Since Taco Del Mar prepares their products right behind the counter, in fort of the customer, they will have a relatively inelastic demand curve allowing Taco Del Mar to become a price setter to a certain extent. Other firm’s will have to advertise in order to convince potential customers that their product is different or superior to Taco Del Mar and the firm that has been in Hawaii all along, Maui Tacos.tacos-elasticity.doc