Economic Wisdom to Apply in Your Twenties

Chapter 10

Chapter 1 Section 3 Why Wine in Restaurants Must Not Be Cheap
The twenties are the age that loves to play and make trouble. Eating big meals, watching movies, going to bars, etc. are no strangers to you.After going to restaurants and movie theaters, you will definitely have this feeling: the drinks in restaurants are very expensive, and the popcorn in movie theaters has never been cheaper, which makes people feel like they have been severely "slaughtered".

Drinks in restaurants and popcorn in movie theaters are expensive.A newspaper once made such a comparison:
The price of a 500ml bottle of Coca-Cola in ordinary stores is 4 yuan, but in restaurants, the price of 500ml Coca-Cola on the menu can be as high as 20 yuan.Not to mention alcohol, it is not uncommon for supermarkets to sell one or two hundred yuan of alcohol in restaurants and bars, and the price doubles.A similar situation exists with the price of popcorn in movie theaters.

Why is this?Everyone knows the prices of these drinks and food in ordinary stores. Why do restaurant owners and movie theater vendors still insist on such "naked" profiteering operations?
Economists are not surprised by this phenomenon.

First of all, in hotels and movie theaters, alcohol and popcorn are scarce to a certain extent. In these two places, the resources of alcohol and popcorn are limited compared to the needs of a large number of people who are constantly flowing.Moreover, customers may not be able to easily find alternatives in a short time.Therefore, under the situation of "rare things are more expensive", their prices will naturally "increase all boats".

Secondly, high price pricing is also a strategy for merchants to set prices.Most of the customers who come to restaurants for banquets or to watch movies in cinemas are high-spending groups who are not sensitive to prices.Since watching movies and eating out are not normal behaviors in daily life, but to spend once in a while with relatives, friends or lovers, this type of consumption is more about spiritual enjoyment, just having fun, and the price is not too much too fussy.At the same time, Chinese people's "face" consumption psychology will also support merchants to set prices high. When watching movies with lovers or inviting VIPs to dinner, those who pay the bill will grit their teeth and "swell their faces to make them fat" even if they know the prices are high.

Furthermore, commodities such as drinks and popcorn are the source of profit for restaurants and movie theaters.From the perspective of restaurants, many merchants regard the proceeds from drinks as a large part of their profits.According to relevant industry insiders, 30% of the catering revenue in hotels and restaurants comes from drinks, and the profit of drinks is 70% higher than that of meals!Of course, 30% is just an average value. Different restaurants and hotels have different prices for various drinks.If you go to a five-star hotel, the price of drinks may be several times that of ordinary restaurants.The more high-end restaurants, while providing you with more advanced services, a large part of their costs and benefits have to be paid for by drinks.

You may still have questions, why do movie theaters not raise the price of movie tickets, but choose to make huge profits in popcorn?Most movie theaters still hope to attract more audiences through cheap movie tickets. Buying movie tickets is a necessary consumption for consumers who visit movie theaters, while buying popcorn or other souvenirs is optional consumption.Therefore, movie theaters will rent out venues to vendors for the operation of related commodities. On the one hand, they can bring high profits to themselves, and on the other hand, they can also provide consumers with more comprehensive and convenient services.The same goes for expensive drinks in restaurants.

From the above analysis, we can know that there is a reason why the prices of drinks in hotels and popcorn in movie theaters are expensive, and sometimes it is necessary-if you think it is expensive, you can choose not to eat its popcorn and drink it. drinks.

Wisdom Trivia: Why Movie Theater Popcorn Is So Expensive
Richard McKenzie, author of "Why Movie Theater Popcorn Is Expensive", is a professor at the Paul Morridge School of Business at the University of California, Irvine. He has authored many books on economic policy.

"Why Movie Theater Popcorn Is So Expensive" attempts to solve a series of pricing mysteries:

Have you ever wondered about:
Why do all movies, whether they're blockbusters or creepy little ones, pay the same price?
Why is there sometimes a free lunch?
Why do so many price tags end in "9"?
Why do ink cartridges cost as much as printers?

Why do merchants engage in activities such as promotions, discounts and coupons?

Why can't customers stand the temptation of long queues?
Why do men all over the world earn more than women?And will always earn more than women?
Why do these things happen?If you think about it, over and over again, you will know the answer.

In "Why Movie Theater Popcorn Is So Expensive," you'll discover the surprising and complex real reason.

(End of this chapter)