Van Goodwin

A member of the Philip Greenspun's Homepage community since August 1, 1999

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January 11, 2002, on Welfare Reform:
The very same little glass vase hand-made in Mexico sells for $0.79 at Wal-Mart and $19.95 at a trendy boutique. The demand in the target market primarily drives the price, not the cost of production. Likewise, as someone stated previously, just because you offer to reimburse McDonald's $2 for the free meals doesn't mean they'll bite. Why not? Even if it's free, the demand won't be there in any numbers to be profitable. Let's assume that the production of the meal only costs $1. All the people who did pay $4 are now paying $2 (via the government program). If my math is correct, McDonald's just took a 67% cut in net profits on this product from their largest customer base. Now, just for the heck of it, let's pretend that there are actually enough homeless people in the city to compensate for the tremendous loss in profits. Let's pretend that if ALL the homeless people in the city claimed their free burgers, it would actually be enough to compensate for the drop in profits (it ...