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> I'm not sure raising the price even solves the problem. Priced correctly, it should. if coffee buyers sit around long enough to deny a second ground of cust

by princeb 13y ago

> I'm not sure raising the price even solves the problem. Priced correctly, it should. if coffee buyers sit around long enough to deny a second ground of customers a table to sit at, the appropriate price for a coffee could be something like, the original price of the coffee + the average amount earned from a single group of customers. for example if the coffee original costs $5, and the typical table holds 2 persons earning you about $7 each, then the appropriate price for a coffee (unbundled) is maybe $19. if someone decides that $20 coffee is worth it, then it makes no difference to you that you sold him the coffee and let him sit around for an hour without another table of customers coming in. if not, he will not be there, and you could now host another table of paying customers.

YZF 13y ago
Some people ordering coffee aren't going to sit around for a lot more. So the nominal cost of coffee would be the price where offering coffee or not offering coffee yield the same profit and we can't really tell where that is. On the other hand, maybe having expensive coffee on the menu will impact other buying decisions people make, it's perfectly possible that coffee at any price will have a negative impact on profit. It's not a simple question of supply and demand because of the mix and crosstalk.
mistercow 13y ago
Well tedunangst's point, which is worth considering, is that the customers who hang around will bypass the whole raised price scheme by ordering an actual meal and getting the discounted price. But that's still avoidable by having the discount structured so that you just can't get a Turkish coffee without paying some minimum amount, determined by trial and error to make it nonviable for retirees to purchase and then sit around all day. With that scheme, however, it becomes more complicated to work out what price makes it worth it for them to actually just sit around, because you also have to factor in the cost of the food they're wasting.

by princeb 13y ago

YZF 13y ago

Some people ordering coffee aren't going to sit around for a lot more. So the nominal cost of coffee would be the price where offering coffee or not offering coffee yield the same profit and we can't really tell where that is. On the other hand, maybe having expensive coffee on the menu will impact other buying decisions people make, it's perfectly possible that coffee at any price will have a negative impact on profit. It's not a simple question of supply and demand because of the mix and crosstalk.

mistercow 13y ago

Well tedunangst's point, which is worth considering, is that the customers who hang around will bypass the whole raised price scheme by ordering an actual meal and getting the discounted price. But that's still avoidable by having the discount structured so that you just can't get a Turkish coffee without paying some minimum amount, determined by trial and error to make it nonviable for retirees to purchase and then sit around all day. With that scheme, however, it becomes more complicated to work out what price makes it worth it for them to actually just sit around, because you also have to factor in the cost of the food they're wasting.