> You literally couldn't model your restaurant's business finances on the basis of micro-economic models.
If a restaurant lowers the price for a given quality of food, will it increase demand for its services? Probably
If a restaurant provides discounted prices for items during certain low demand hours (happy hour), will it be able to increase demand for its services? Probably
If other restaurants decrease prices during low demand hours, will it decrease demand for its services? Probably
> they set the price for the revenue they want, not what the market will bear
If the price they set for the revenue they want is not what the market will bear, then they lose money. Done long enough, they go bankrupt.
Am I arguing that this is always 100% perfectly true? No. Is it true more often than not that it can be demonstrated with evidence? Yes.
If a restaurant lowers the price for a given quality of food, will it increase demand for its services? Probably
If a restaurant provides discounted prices for items during certain low demand hours (happy hour), will it be able to increase demand for its services? Probably
If other restaurants decrease prices during low demand hours, will it decrease demand for its services? Probably
> they set the price for the revenue they want, not what the market will bear
If the price they set for the revenue they want is not what the market will bear, then they lose money. Done long enough, they go bankrupt.
Am I arguing that this is always 100% perfectly true? No. Is it true more often than not that it can be demonstrated with evidence? Yes.