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Take the economic literacy test; It's a bit of fun
Topic Started: 15 Oct 2016, 05:06 PM (3,522 Views)
Rufus
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Jimbo
16 Oct 2016, 07:51 PM
Costs can always be reduced and there is no minimum cost of anything.

You can turn a profit without charging the consumer anything.

I don't pay Alex for access to this website.




There is a minimum cost in food.

New outlets will certainly lift quality and reduce prices. Any outlets who can't compete on price or quality will cease to exist.
Edited by Rufus, 16 Oct 2016, 08:04 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Jimbo
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Rufus
16 Oct 2016, 08:04 PM
There is a minimum cost in food.

New outlets will certainly lift quality and reduce prices. Any outlets who can't compete on price or quality will cease to exist.
What is the minimum cost of food?

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Khaderbhai
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Wealthy Suburbanite

Jimbo
16 Oct 2016, 07:51 PM
Costs can always be reduced and there is no minimum cost of anything.

You can turn a profit without charging the consumer anything.

I don't pay Alex for access to this website.
In terms of operating expenses, there a few key differences between a restaurant and a website. I'm hoping you can work out what they are for yourself?

If you can figure out those differences, you'll begin to understand why the cost of food in restaurants has a lower-bound, beyond which the restaurant won't be profitable.

Have a think about it.
Jimbo
16 Oct 2016, 09:08 PM
What is the minimum cost of food?
Hmmm, OK I can see you're not going to work this out for yourself.

For a typical restaurant, you've got rent, insurance, electricity, gas, cooking staff, serving staff, cleaning staff, management staff, ingredients and advertising.

I'm sure there are more. If all of these costs are not covered by the sale of the end product, then the restaurant goes out of business.

That's why restaurants tend to charge customers for food, rather than giving it away for free.
Edited by Khaderbhai, 16 Oct 2016, 09:54 PM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Rufus
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Jimbo
16 Oct 2016, 09:08 PM
What is the minimum cost of food?
If you want people to pay to come to your restaurant, you have to feed them, and food isn't free.

There is a minimum cost. Outlets like Pizza chains or burger chains do get better prices than single restaurants, and their set menu is set up to be as cost efficient as possible, but absolutely nothing is free, not even the water they boil their spuds in.
Take risks - if you win you will become wealthy, if you lose you will become wise
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A Lurker
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Khaderbhai
16 Oct 2016, 07:24 PM
No. Costs can only be cut so far while still remaining profitable, and customers will buy where they can find the best quality food. Vendors will be forced to compete on quality. The correct answer is correct. Monopolies are bad for consumers. Increased choice is good for consumers. Economics 101.
Normally I'd agree with you but fast food economics is different from other products.

The really big chains standardise quality to a fine art so quality doesn't vary that much but if there is too many in one area they will compete on price with each other and the one that 'wins' tends to be the cheapest but with skinny staff roster so as it gets busier cleanliness of customer areas declines and pumping the food out goes up a notch. Customers aren't that fussy (if it's cheap enough and has enough fat and sugar) so it actually can get more popular, cheaper and worse.
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Jimbo
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Khaderbhai
16 Oct 2016, 09:47 PM
For a typical restaurant, you've got rent, insurance, electricity, gas, cooking staff, serving staff, cleaning staff, management staff, ingredients and advertising.
All of these costs can be reduced.


Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Foxy
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Zero is coming...

Jimbo
16 Oct 2016, 05:32 AM
You and I and the bloke down the road all know that having 10 Maccas in the street is worse than having no Maccas in existence anywhere on the plant.

That's economics. Billionaires don't become billionaires by making the world a better place,
in the case of fast food, too true.


Rufus
16 Oct 2016, 08:04 PM
There is a minimum cost in food.

New outlets will certainly lift quality and reduce prices. Any outlets who can't compete on price or quality will cease to exist.
Quality??

Edited by Foxy, 17 Oct 2016, 12:42 AM.
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Khaderbhai
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A Lurker
16 Oct 2016, 10:44 PM
Normally I'd agree with you but fast food economics is different from other products.

The really big chains standardise quality to a fine art so quality doesn't vary that much but if there is too many in one area they will compete on price with each other and the one that 'wins' tends to be the cheapest but with skinny staff roster so as it gets busier cleanliness of customer areas declines and pumping the food out goes up a notch. Customers aren't that fussy (if it's cheap enough and has enough fat and sugar) so it actually can get more popular, cheaper and worse.
The question doesn't limit it to major chains. It could be any combination of Chinese, Indian, Thai, Vietnamese, Greek, Turkish, Mexican, Japanese etc. as well as traditional fish & chips, burgers, chicken, pizzas, pies etc.

Overall, a greater choice of fast food options will be beneficial for consumers. If the local pizza is excellent but the kebabs are rubbish, people will tend to buy more pizzas and less kebabs until the kebab vendor is forced to improve quality or close down.

And even among large chains, I would argue that Red Rooster would be of even lower quality were it not for the competition provided by Nandos, Oporto and KFC.



Jimbo
16 Oct 2016, 11:46 PM
All of these costs can be reduced.
Costs can only be cut so far while still remaining profitable, and customers will buy where they can find the best quality food. Vendors will be forced to compete on quality.
Edited by Khaderbhai, 17 Oct 2016, 07:10 AM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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zaph
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Khaderbhai
17 Oct 2016, 07:07 AM
traditional fish & chips
Is the traditional fish and chip shop going extinct?

The two closest to me have closed down. One near my parents closed down. These provided good to excellent food and very good prices.
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Ex BP Golly
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foxbat
17 Oct 2016, 12:41 AM
in the case of fast food, too true.



Quality??
Is there a quality grading on mechAnically reclaimed meat, or is it the glue they use to shape it into a robust handling components that is the measure.

Yum yum!
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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