If you're at the absolute bottom of the market in terms of price and quality then your sales are probably somewhat inelastic. Especially if people have to buy y

If you're at the absolute bottom of the market in terms of price and quality then your sales are probably somewhat inelastic. Especially if people have to buy your product or a similar product. It's the same reason why prices keep going up at the grocery store. Those companies know you're going to buy groceries anyway and most people are going to buy the name brand instead of the store brand. Where McDonald's runs into trouble is if their prices get so high that you might as well just go to a sit down restaurant instead. Five Guys and Smashburger are getting pretty close to that territory especially with the tipflation added onto their already high prices. The other risk for McDonald's is that somebody else will try to replace them as the replacement level[0] restaurant. If your customers are choosing you because you're the cheapest and fastest restaurant then you can't afford to have a competitor undercutting you on price or speed. That's why it's so surprising to me[1] that McDonald's would be raising their prices aggressively. Even if they improved the food quality dramatically, they're not going to be able to move their brand up market because their existing reputation is well established. [0]: https://en.wikipedia.org/wiki/Value_over_replacement_player https://en.wikipedia.org/wiki/Value_over_replacement_player (McDonald's is basically the restaurant equivalent of this baseball analytics concept) [1]: I virtually never eat at McDonald's so I was completely unaware that they've been jacking up their prices. I don't even know where my local McDonald's is without checking Google Maps.