McDonald's is willing to sell a second drink at half price

Source: Internet
Author: User
Keywords Why McDonald's
Tags consumers cost different example internet it is key raw material

Absrtact: There is an explanation on the Internet: For McDonald's, the cost of a drink includes store rent, utilities, labor, and raw materials, and you've already shared all of these costs when you buy the first cup, and the second half price is just the cost of the raw material.

There is an explanation on the Web: "For McDonald's, the cost of a drink includes rent, utilities, labor, and raw materials, and you've already shared all of these costs when you bought the first cup, and the second half price for the next half-price is just the cost of the raw material, the marginal cost, which is very low. So maybe the second cup of McDonald's made more money from you. ”

Economist Xiaonian against the explanation: "This is because the marginal utility of consumers is diminishing, not the marginal cost of enterprises." After drinking the first cup, not so thirsty, the second drink brings the satisfaction of less than the first cup. ”

The first explanation fits the intuitive thinking of most people, but it is wrong. Pricing is not determined by cost. You picked up a diamond at a market price of 100,000 yuan in the mountains, and you won't sell it for 10 yuan because it costs less. You will still sell it to the highest bidder. Similarly, McDonald's will not be sold at half price because of the marginal cost of the second drink, it is selling half-price, consumers are unwilling to pay a premium for the second drink.

McDonald's consumers make the most of their first drink. Of course, McDonald's is not satisfied with only the first cup of money, for it, can earn a little more. But consumers have refused to pay the same amount for a second drink, so McDonald's has adopted a differentiated pricing strategy, which is called "price discrimination". This price discrimination is good for McDonald's and consumers: consumers enjoy a second drink at a lower price, McDonald's makes more money, and both sides get the rest.

Price lattice is a very common phenomenon in life. For example, many supermarkets, there is a membership card customers and no membership card customers, shopping prices are not the same, this is a price discrimination, people will not feel that members enjoy a lower price there is nothing unfair. Price discrimination is a neutral word in economics and can benefit many parties.

For producers, they always want to earn any level of consumer money. Suppose a product from 10 to 100 yuan, people are willing to spend, but if the price of 100 yuan, is to earn higher unit gross profit, but will scare off low-cost consumers, if the price of 10 yuan, the retention of low-cost consumers, but did not fully earn the high price of consumer profits. In this case, the best strategy for producers is to take different pricing for different consumers.

How to distinguish different levels of consumers, is a technical problem. In the market, there are many ways to differentiate different consumers. For example, McDonald's second Cup to distinguish consumers, supermarkets to the membership card to distinguish consumers. In the field of education, discriminatory pricing is often based on performance.

A forum Netizen says, oneself reads the key middle school, to those who score not enough, but more money can enter the key middle school student very dissatisfied, feel unfair. But one day he had an epiphany: did the school's teaching facilities better than those of other schools be bought with the students ' money? And these facilities are available to all, and the students who study well actually enjoy the benefits of paying more students.

The discriminatory pricing in education, though much blamed, can still exist. In some state-owned monopolies, producers do not have the right to discriminate pricing, resulting in a "price hearing" freak. Enterprises to increase prices, need to gather a lot of people to carry out price hearings, to determine whether its price is reasonable. The key point of the hearing is the production cost of the enterprise. It can be seen that the fallacy of "cost decision price" is deeply rooted.

What are the consequences of this hearing, which is based on cost to determine price? Take water price as an example, there are many low-income people who do not want to see water price rise. But the low price of tap water, the rich water consumption, such as golf players, will be not sensitive to water prices, which will cause a lot of waste. And since the water of the poor and the rich is uniformly priced, water companies cannot be priced too low, which actually raises the price of water for the poor.

Conversely, if water companies are allowed to discriminate on pricing, water companies can either earn higher unit gross profits from the rich or retain the poor who offer lower-unit margins. As for the discriminatory pricing method, it can be studied by the water company itself. For example, many scholars put forward according to the water consumption ladder pricing, perhaps is a good way. Of course, whether it is really good, but also the producers themselves to judge.

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