Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.
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New businesses typically lower prices so that consumers try out their business, as consumer behavior is based around habits and attachment to routine — lower prices break this cycle. If you’ve noticed this is why newly opened stores have sales / deals. McDonald’s also may be over-pricing an item and at the same time a new competitor can’t compete due to economy of scale
Thy will have to invest based upon the idea that the business they invest in is actually valuable to society. If it is valuable then it will grow and profit for a period, and if the profits are too extravagant than the Government steps in — and this is a good threat because it makes investors vote for boards that lower prices themselves, lest the government step in.
Okay, but how's that relevant to why McDonald's wouldn't set their price to $10, get the Wendy's to set the price to $10, and also get every other competitor in a large radius to set their price to $10?
Also, how does that square with how most of the McDonald's I've been to having the exact same prices, even if they're geographically in very different areas? I don't think I've ever once seen one lower its prices in response to a new restaurant opening up across the street.
Even if the private company earns so much profit by simply making an amazing product everyone wants to buy and can't produce enough supply to meet demand even when they try, e.g Ozempic or Nvidia?
Edit: Reading your responses and your replies to other commenters, I strongly recommend you go through the Khan Academy economics courses or another standard economics class. I think you'd learn a lot.
I appreciate your advice to look at Khan Academy. I will look for a cost-efficient reading comprehension program to suggest you.
That wasn’t in the reply I replied to. You are asking me why my explanation for X does not reply to the non-existent question Y. In fact, you asked Y three posts up, and to that I replied
Now clearly this answers your question as to why all fast food locations can’t arbitrarily raise their prices to infinity. They compete with grocery stores, which have more competition over prices due to the variety of bulk retail outlets, online grocery orders, and so on, and which the consumer plans trips to in advance. This is different from having a limited number of expedient food options near your work.
I have no idea, you could have googled it
https://www.huffpost.com/entry/why-mcdonalds-prices-are-wildly-different-from-one-location-to-another_l_65665af4e4b03ac1cd17b7d9
From the article:
Back to you:
We have to ask, (1) should the developer of Ozempic make as much money as possible, or (2) should the developer of Ozempic make approximately the amount of money that a reasonable developer would consider justifies his research. My position is the second one. (If this is too many words of commas let me know and I can rephrase). Imagine how evil it would be if the scientist who discovered penicillin tried to maximize profit.
This is just where we arrive at a differential in positions on economic theories. My wager is that if there had been a substantial profit motive, industrial manufacturing would have started up more quickly. I don't think there is a plausible case for patenting the relevant molecule, since it can be isolated from naturally occurring molds, just the industrial processes used to manufacture it in large quantities. Here's the summary of that development where manufacturing at scale wasn't feasible until Pfizer developed the process for doing so.
To the extent that IP laws could have allowed monopolization of penicillin or regulators could have prevented competition by not allowing different companies to manufacture penicillin, these are complaints about government regulation rather than profit motive. While there are market failures, what we mostly find in competitive markets is that prices come down and goods become broadly available. Despite the object-level complaints on the price of McDonald's in this thread, pretty much everyone can afford a Big Mac and almost no one thinks that the situation would improve if governments were responsible for the manufacture and distribution of burgers.
To the Ozempic example, the ability to profit-max outside the bounds of what most would consider ethical is a product of regulatory capture, not a unique process for creating semaglutide that no one else can match.
I agree with you that repealing IP laws would increase competition and lower prices significantly — look no further than Stanley Cups, why should one company make so much profit on cups just because they have the funds to psychologically manipulate the public’s desires — but economies of scale come in and demand centralization. One or a few factories producing Ozempic will always be more efficient than a dozen or two dozen, no? It could be this way with fast food giants, as well. McDonald’s and a couple other giants simply due to economies of scale and accumulated institutional knowledge can uniquely lower food prices, but it’s unlikely this will ever happen because nothing enforces the competition past a certain point (“lower than grocery stores and not painfully higher than competitors” is all their profit needs to be, but they will never willingly race to the bottom for prices because they can anticipate lower total profit as a result)
In what way did IP laws help Stanley sell cups? Are you seriously advocating repealing Trademarks?
Trademarks should be used to compensate for the cost of innovation. The reason Stanley profited so much from their product is that they succeeded in manipulating female buying preferences by associating it with high status. That’s it. It’s a grotesque waste of resources and predicated on manipulating the public imagination. So in the case of stupid cups and other status items, there should be no trademarks (maybe a small number on the bottom of items to guarantee quality with a trusted producer only).
It’s funny that this is where the buck stops with capitalists. No no no, you can’t regulate like this, you need to regulate like that! Changing how we regulate is unthinkable!
That's not what trademarks are for. Trademarks are for authenticating products as coming from one manufacturer and not another.
As far as I can tell this is false.
https://www.retaildive.com/news/stanley-quencher-tumblers-viral-success/699416/
They were not putting money into marketing or selling the product and the popularity seems to have been driven by a group of Mormon influencers who placed a bulk order for ten thousand mugs and resold them to their followers. They sold out of them in short order and only then did Stanley get in on the action.
That’s not what trademarks are for in practice. They are for signaling status. Any visible trademarked logo you see is for status. I’m all for manufacturer authentication, just not visible externally or too small to be noticed by someone else.
https://www.newyorker.com/culture/infinite-scroll/how-the-stanley-cup-went-viral
Outsourcing marketing is marketing
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