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That is true, but it is why I said "nearly". The largest cost in any fast food restaurant is almost certainly labor.
by skynet-9000 5y ago
That is true, but it is why I said "nearly". The largest cost in any fast food restaurant is almost certainly labor.
- maxerickson 5y agoLabor costs are obviously not nearly 100% of revenue, no one would bother operating a franchise.
- josephcsible 5y agoThey're nearly 100% of total costs, not of revenue.
- maxerickson 5y agoDoubling prices would double (incremental) revenue.
- josephcsible 5y agoNo it wouldn't, because with those higher prices, you'd have fewer sales. Edit: Incremental revenue? Okay, that it would double, but so what?
- maxerickson 5y agoWages obviously aren't the only significant cost is all. I was being chippy with the first comment about revenue, because that's the corner the other poster decided to argue from, that wages are the most significant cost (which I combined with their earlier implication that doubling wages would nearly double prices, a statement that implies the starting wages more or less match the starting revenue).