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If you don’t operate a restaurant on lean margins, you won’t have any customers because your prices will be too high. The competitive market forces low margins
by ttul 7y ago
If you don’t operate a restaurant on lean margins, you won’t have any customers because your prices will be too high. The competitive market forces low margins and thus low capital overhead.
- perl4ever 7y agoYes, my point is the equilibrium gets lowered further if people are willing to accept lower profits or losses due to intangible reasons and/or commitment to sunk costs, self-image, etc. This is more characteristic of small businesses than large ones, of whom people always slam "bean counters". Saying "the competitive market forces" is not a proof or an argument that competition has to produce the outcomes we see. If people were different, less willing to take risks, then there would be less pain in a crisis.