Microeconomics101

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 3
Microeconomics
Due Date: 15/11/2025 @ 23:59

Student’s Name:ASEEL ALI AL ABDRABUH
Feras Tariq Kadi

Course Name: Microeconomics

Mohammad Alsumain
Student’s ID Number: S240031828 S240029902 –

Course Code: ECON101

S240009631
Semester: First

CRN:
Academic Year: 2025-26th

For Instructor’s Use only
Instructor’s Name:
Students’ Grade:

/10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY
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The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.

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All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.

Activity -Question:
Monopolistic competition
In monopolistic competition, many firms sell differentiated but similar products. Entry and exit
are relatively easy, but firms have some degree of price-setting power due to product
differentiation. For example, with the rapid growth of diverse dining options in cities like Riyadh
and Jeddah, eateries use branding, ambiance, and menu variations to differentiate their products in
a monopolistically competitive market. Based on this context, write report on following aspects.
Part 1: Differentiation by menu and cuisine
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How do Saudi restaurants use their menu and cuisine type to differentiate themselves from
competitors?

Part 2: Differentiation by customer experience and ambiance
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Beyond the food, how do different dining concepts in Saudi Arabia differentiate through
ambiance and the overall customer experience?

Part 3: Market segmentation and target audience
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Explain how these different dining concepts (traditional, fast food, and upscale) target
distinct market segments within Saudi Arabia. What specific needs, preferences, and
price points do each of these concepts cater to?

Part 4: Implications for monopolistic competition
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Using the analysis from the previous three parts, discuss the specific characteristics of
monopolistic competition that are reflected in the Saudi restaurant industry.

Answer:
PART 1 ANSWER BY ASEEL. – Nowadays, having good prices and good customer service is
important, and at the same time, having a good place for dining in is also a major factor.

Let’s talk about what they can do to be better than others. Creating a unique signature dish that
other competitors don’t have is one way.
Serving dietary needs, like making a menu for low-calorie, gluten-free, or lactose-free options, is
also important. Having good options allows us to serve more people, giving us an advantage over
competitors.
Focusing on ingredients is an important factor to stand out from all competitors. For example, we
can highlight the source and quality of ingredients, such as emphasizing local Saudi farms,
organic produce, or premium imported items.
Another common thing is to differentiate by mastering one single dish or item. For example, we
sometimes go to a specific restaurant that is known for a specific dish like kabsa

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PART 2 ANSWER BY FERAS
After explaining in part one, on how restaurants can differentiate themselves based on their
products, menu items, and ingredients, in this part we focus on another direction of competition
which is the customer experience and the overall ambiance of the place. Nowadays, people don’t
choose a restaurant only because of the taste. The environment and the feeling that the customer
gets during the visit also affect the decision.

Many restaurants in Saudi Arabia use the ambiance to stand out. For example, some restaurants
follow a modern interior design that matches the style of young people and encourages them to
take pictures and share on social media. Others choose traditional Saudi interior design to give a
cultural experience that reminds customers of local heritage.

Lighting, music, decorations, and even the smell of the place are all used as tools to create a
special atmosphere. For fine dining restaurants, we usually see soft music, warm lighting, and
professional service. For casual restaurants and fast food places, there is usually brighter lighting
and faster service to match the customer expectations.

Another point is the family needs in Saudi society. Many restaurants offer private rooms for
families or areas for children to play, which makes the experience more comfortable and
increases the chance of customers returning again.

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In conclusion, differentiation is not only about the food itself. Restaurants compete also by
building a memorable experience for the customer. A strong ambiance, good service quality, and
attention to details all play a big role in attracting customers and creating loyalty in the
monopolistic competition market of restaurants in Saudi Arabia.

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PART 3 ANSWER BY MOHAMMAD:
Now after explaining the Part.2 about how the Saudia restaurants can be differentiated on the
ambiance and customer services. Now we go on the 3rd part, on how the market segment distinct
by it concepts and specific needs.
In the Saudia restaurant market, differentiation isn’t random or happen by just luck, its deliberately
worked on with strategic way used to capture the district market segment.

Restaurants have three specific targets to carefully follow on and combine it:
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Menu, that’s the communication between customer and what he wants.

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Ambiance, the environment where it determines which specific customers to be focused
on.

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Price point, to show the market position, between premium, mid-range, or budget.

Those strategies discussed in part. 1, and Part. 2 are tools that are used to capture the specific
customers segments based on their needs, preferences and price point.

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1. Fast Food:
This segment targets customers who prioritize speed, convenience and low price
While the target audience of this segment is: students, busy employee, and families who
find quick and low-cost meal. this restaurant meets these needs with standardized its menu
to be convenient for a customer to be fast service, “not as premium imported”. As for the
ambiance as Part.2 mentioned those uses brighter lighting and fast service to meet the
customer’s expectations for convenance.

2. traditional Saudi Restaurant:
and this segment targets who are local in the country, families, older generations, and
tourists who look for the authentic food in this country.
They manage their target by fulfilling the customer’s needs by offering cultural authentic
food for specific restaurants “such as Kabsa as mentioned in Part.1”, a privacy support
place to make sure families have appropriate and comfortable place, traditional decor is
also an important factor for this segment to match the target’s needs, and most importantly
familiar tastes that meet the customer’s expectation for his kind of food that he likes.

3. Upscale dining restaurant:
This segments targets who have high income individuals, couples, professional businesses
dinners, couples who seek for premium memorable experience. For this audiences the high
price point is justified by the strategies as for it parts, a customer expects the “unique
signature dishes” and “premium imported ingredients”, (discussed in Part.1). also, the

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specific ambiance for this restaurant segment as described in Part.2: modern interior design
(usually for social media), “soft music, warm and soft lighting, and professional service”
to create a feeling of exclusivity luxury.

In conclusion, restaurants don’t just choose around the menu or decor; they deliberately
combine this elements to attract specifically chosen customers.

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