Thursday, March 26, 2020

when you don't understand
supply and demand

Went to a local chicken place for lunch today. The meal I was looking to get would have cost me, in normal times, W17,000. But these are not normal times: the current pestilence has driven customers away; no one wants to congregate in restaurants, it seems, so in-resto business has dried up—or such was my impression today. The guy at the cash register told me I could sit down wherever, and that I could pay upon leaving. So I ordered the meal I normally get from this place, then I ate it... and when I went to pay, I was charged a whopping W21,000. I asked why the price had gone up so much, and the guy gave some explanation that involved the current situation. Mentally, I was going, Huh? When I told a coworker, later on, about what had happened, he blurted, "But that's not how supply and demand work!"

Exactly. High supply but low demand normally means lower prices to attract customers, for that's how you increase demand. What's going on here? If I'm to be charitable, I'm going to guess that the management is reasoning that whatever customers come in must be desperate to eat the restaurant's chicken, so they'll pay a higher price for it. In my case, well... I guess I paid the higher price. But that strategy works only once: I won't be coming back to this place until the crisis is over, and prices have gone back down.

Before I left the resto, the cashier lamely added that there's a 10% discount for take-out and delivery. That would have put the price at around W19,000, which is what a person would have paid for delivery back in the day (W17,000 base charge + W2,000 delivery surcharge). I won't say "Never again!" regarding this resto, but I will, sadly, have to say, "Bye for now."

1 comment:

Charles said...

Is it possible that their supply chain has suffered from the pandemic?