If I sell sandwiches to 10 people at $10 per sandwich, then raise the price to $30 and lose 5 customers.

[Yavin4]

I still would have increased my revenue by 50%.

Businesses do not care about losing customers to higher prices so long as the remaining customers pay more for the same goods/services which more than makes up for lost customers.

Economics isn't my strong suit. But I think that's what we're experiencing and why so many people hold a negative view of the economy overall. There's enough demand for higher priced goods that businesses can show increased profits over less consumers.

If Disneyland charged $2000 a ticket just to get into the park, it wouldn't matter bc enough people would buy at that price to make up for the lost customers.

[jimfields33]

1. Business wise it's actually better to have higher prices.

Less stock, less overhead, less employees. As long as you have just enough customers, the business will be good.

[Yavin4]

3. A regular coffee at Starbucks in NYC is almost $4.

It's priced to deter consumption.

[jimfields33]

6. That's actually not horrible

I went to subway today for the first time in literally 5 years and a foot long set me back $12.97. I almost had a culinary. I’ll never step foot in one again. Now that is outrageous pricing.

[ProfessorGAC]

14. Nice Pun

"I almost had a culinary"
Funny stuff.

[jimfields33]

15. lol. Rare humor.

[ProfessorGAC]

17. And, BTW...

..I agree with you on Subway. We've sworn off. If we want simple & fast, I go to the supermarket and get fixing for subs. 6 slices of ham, 3 slices turkey, a head of iceberg, a tomato, a green pepper & the store French rolls.
Probably $15, and we have enough for three big sandwiches. Plus the lettuce is left over for tomorrow.
I think Subway prices are ridiculous. Not that they caused a culinary or anything!

[Marcus IM]

5. Especially for a monopoly with little if any regulation.

Capitalism is a system of rationing.

Those with enough money get product/service X.
Those without enough money do not get product/service X.

Capitalist rationing works great for everyone ... everyone who is rich.

[Marcus IM]

2. How much did you distribute to your shareholders? Or did you use profits to buy back shares to further inflate value?

I agree with your premise.

[Marthe48]

4. How do black markets work?

I think it's past time to get some competition against the corporations.

I can't tell you how many things I don't buy now, not because I can't afford them, but because I won't.

[pecosbob]

7. It's about price points.

Businesses determine what they want to take in per customer and adjust prices accordingly.

[Earth-shine]

8. You may lose your remaining customers to a shop that has $20 sandwhiches.

[Yavin4]

12. Why would you when you can charge $30 on a sandwich?

Also, your suppliers know that your competitor is getting $30 a sandwich. So, they will charge you accordingly.

[Earth-shine]

19. If I open a store with $20 sandwhiches, I can steal all your customers.

There's a whole market for people who don't want to pay $30.

You need to find more reasonable suppliers.

That's the nature of the free market. If your prices are too high, someone will undercut you.

[Yavin4]

20. "You need to find more reasonable suppliers."

What if you cannot find them?

There are fewer and fewer suppliers and producers.

https://eatamericano.com/blogs/thoughts-from-the-peanut-gallery/10-food-companies-own-almost-every-grocery-store-item-you-buy

[Earth-shine]

22. I looked at the list. That's packaged food. I'm sure I could find bread and cold cuts without the big suppliers.

My sandwiches will not be more than $20. They should be around $7.

[Oneironaut]

24. That's why you send lobbyists to government to have them force the other shop out of business,

and give yours tax breaks.

[TheBlackAdder]

9. Not only did you increase revenue, but you decreased material goods and its handling by 50%

[Bucky]

10. I teach Supply and Demand in my HS Economics class.

That's one hell of an opportunity cost curve. Cool thing about capitalist economics is that you get to pick whatever price & profit margin that makes you happiest.

[brooklynite]

11. Its not just the seller...

...economic recovery means more people have more money to spend, and post-COVID was a return of consumer demand.

[TheBlackAdder]

13. Disney could really screw over Florida by limiting tickets to those with in-park stays.

.

Disney will get their room money, but less in admission, food and concessions.

They could boost the price a bit on the room rates and other amenities due to limited availability.


The park would be less crowded, like it is in the Spring, before Summer season hits.

They would have less waste, require less staff and it would be more enjoyable.


In-State businesses and commuters would suffer, including anyone staying in off-park lodging and eating off-park.
Less people would bring their own food in from the local Walmart and supermarkets too, helping to offset food sales.

.

[ProfessorGAC]

16. The Ideal Point Is Called Equilibrium

It's the point that maximizes volume at which the entire supply will be sold at a price point that maximizes margins.
Your thought that just raising prices doesn't work in reality when the price gets prohibitive. There's a upper limit.
In your example, losing 50% of customers at 3x the price is awfully optimistic.
That approach might work if there were nobody out there to compete on price.
Profits go up whether it's because unit price increases or volume goes up. Increased volumes often are ideal because few businesses are constantly running at 100% capacity. So, increased volume carries no added overhead, only raw materuak costs.
If demand gets to the point where added expense, or capital, or both are needed the value of growth vs. short term profits becomes part of the decision making process.
Be careful not to get caught in the Econ 101 trap that supply & demand functions as 2 dimensional, X therefore Y, constructs.
In reality, there are several X's exerting leverage on the outcomes.

[Yavin4]

18. Response

In your example, losing 50% of customers at 3x the price is awfully optimistic.

Yet, it's currently happening bc of food delivery services.

That approach might work if there were nobody out there to compete on price.

When there are fewer and fewer suppliers and producers, there's very little price competition.

[ProfessorGAC]

23. You're Kind Of Moving The Goalposts

You weren't talking about food conglomerates. You're example was sandwiches. There is immense competition in that field.
Besides that, back in the day when there were basically 3 US car makers, Volkswagen, Toyota & Nissan, so a gigantic market split 6 ways, what you describe did NOT happen. (Yeah, I know BMW & Mercedes were there, but that was a luxury niche.) Those companies still competed on price, features, & cache.
Same thing in heavy equipment.
Do I think we have relaxed antitrust regulation too much? Definitely, I do. But, it's specious to suggest there's no competition.

[JI7]

21. People get angry having to pay for basic needs

but they will still spend a lot on useless "luxury" crap.