Re: Blind man and an elephant
by
garkon38
04/01/2008, 9:02 AM
Thanks for comment. True, seller motives might be concealed, but I talk to business folks a lot, and there's often a lot that's not obvious at first glance driving pricing and other decisions. For example, the realization that the bulk of a restaurant's profit comes from drinks means that having SOME line of people waiting in the bar (and buying drinks to kill time) makes a ton of sense for certain types of restaurants. A microeconomist might assert that the line is just loss and that the restauarant should raise prices on the food. Big mistake -- perception of value on food is what brings customers in, and drinks costs are often seen by patrons as a modest addition to the cost of the meal. But they're the restaurateur's bread-and-butter, profit-wise (no pun intended). Talk to a few owners and this fact will pop up. (note that this does not apply to all types of restaurants -- have to have the bar waiting area).
On the subsidy point with Disney, the reason I'm not sure this is "really" the case is that I don't know where Disney actually makes its' margin. If kids' spending (or kid-driven spend) in gift shops and in-park eateries is a huge chunk of the profit (and I expect it is), it may in fact be the case that kids are subsidizing adults at the end of the day even after accounting for the discount. That said, you might be right and I could be entirely wrong -- would want to do the math to understand what is really going on.