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To: Jim Robinson

This craptastic analysis fails to consider one of the most elemental aspects of marketing, which is often called “price elasticity of demand”. They assume the number of Big Macs sold will be the same, regardless of price. Does anyone really think that will be the case?

Demand for some things is pretty inelastic, such as gasoline. When the price goes up, we just pay it because we judge it’s better than the alternative (such as walking, not taking a trip, etc). But Big Macs have to compete against other meal choices, and increasing the price will doubtless cause some potential consumers to make a different choice. It’s possible McDs revenue will drop enough that they’ll make less money at the higher price than presently.

Of course, none of this would be apparent to a Huff Po writer, because it’s free market capitalism.


11 posted on 08/01/2013 9:48:01 PM PDT by bigbob
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To: bigbob

Fast food prices have already reached that point for me.

It really helps to drop some weight so I guess that’s good but seldom eat out now. When I do I go to a real restaurant

It simply is not worth the price any more for me


14 posted on 08/01/2013 10:06:18 PM PDT by Fai Mao (Genius at Large)
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To: bigbob

Peanut butter sandwich prices will stay the same. So will cans of soup for the office.


15 posted on 08/01/2013 10:16:01 PM PDT by Vince Ferrer
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