On Saturday 26 Apr 2008 4:40:15 am Rishab Aiyer Ghosh wrote: > and it's simple economics that if you make something like a milk shake > 50% smaller, you can't really charge 50% less but only 10-15% less, if > you want to retain your profit margins. and people are less likely to > buy a half-size glass of milkshake for just a bit less than a huge one.
I'm no economist - but I seem to have observed a particular Indian way of selling things that I saw being used in the UK too (for the first time in my experience) a couple of years ago. I am talking about selling one single cigarette from a pack of 10 or 20, or selling a "by-two" coffee. The price, it seems, is rationalized to be more affordable to a larger number of people who want to spend less, while at the same time the seller makes an insane profit on the cost of the original pack as compared to what he would have made by selling the whole pack. Like I said- in the UK a shopkeeper sold me a single AA cell in a deal that cost me a lot less than the price of 4 (leaving me with 3 cells I did not want) while he earned a lot more than 25% of the value of the pack of 4 by selling me a single. shiv
