Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.
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What do you think of Internet outrage of companies raising their prices, chiefly companies like Netflix and fast food restaurants? I think morally, it seems pretty iffy- it's a free market, and if they raise their prices, you can just stop buying what they offer. If the government got involved to set any sort of price ceiling, I think that'd definitely be a bad idea that'd lead to a shortage of some sort.
But if the outrage lets customers act as a pseudo-monopsony which gives them more power, I also don't really mind if they're able to use it to demand cheaper prices, even if I think the accusations of corporations being evil are vastly overblown. Especially when it comes to keeping the price of something like Netflix low, where much of their value comes from having exclusive rights to stream old shows and movies instead of all revenue to them going towards making new stuff or improving technology. If consumer outrage keeps the Netflix price $5 cheaper than it otherwise would be, is anything hurt besides shareholder bank accounts?
I find it tiresome, particularly the way people complain about free content having advertisements with it, but immoral? That feels a little heavy.
On the other hand, I have finally forced my wife to get to the point of rotating streaming services on a monthly basis. I've no doubt they will make month to month subscriptions impossible soon, so might as well take advantage of it while we can.
In general, fast food economics don't work anymore. Only the existing infrastructure and mindshare keep them open. Taco Bell is barely cheaper than our local burrito joint if you're putting together a decent order. We're seeing a definite shift in my area away from McDonald's and towards Sheetz/Wawa/Royal Farms, the food at the latter has improved while the prices are as low or lower.
Immoral in the sense that they're lying about how much money the corporations are making.
I agree. But if it actually works at getting platforms to have fewer ads... then is it actually a bad thing?
It doesn't.
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The falsehoods are easily dismissed, because if the company is healthy and making more money than they let on, then why isn't the advice to the public to just buy shares (at least, of those that are public)? After all, they're just being greedy, so why aren't they encouraging everyone to put themselves on the other side of that equation? And if they're voting shares they also get a say in C-suite remuneration! Wouldn't that be exactly what people who complain about greed be doing? After all, they seem to know so much about running a business and how pricing should work, I'm sure they'd do a great job as investors! /s
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Media companies and fast food companies are pretty dissimilar, and it seems like different things are going on.
I feel fairly hostile toward media companies in general right now, and am sort of rooting for Netflix's price hikes and making households smaller and nearer to result in mass loss of subscriptions, even if it destroys the company and they cease to exist. But then I haven't paid for Netflix (or Disney+, despite having daughters who love Disney shows) for years. But that doesn't mean that it's a moral issue, exactly.
Fast food companies do seem to be genuinely struggling with high price and low quality labor costs, especially, and things are what they are for them. Which doesn't mean I'll keep buying their food, of course. At some point I'll pack my own sandwiches for road trips, though that point is not quite reached. Today we were on a short road trip, deciding between fast food and a local Asian buffet. We went with the buffet, partly because we wanted it more, but partly because it was only about $5 - $10 more for four people than the fast food. It's not wrong for Sonic to cost as much as a good buffet. I'm not outraged. I just don't really eat there anymore. I'm not in the least worried that America will run out of reasonably convenient places to eat, so it's not really a problem if a bunch of fast food chains end up going out of business. There's nothing special, wonderful, and irreplaceable about Wendy's, even if it's slightly less convenient to have to plan a trip to a grocery store for food ahead of time.
Current fast food prices would be a great opportunity for the prepared food industry and convenience stores to swoop in and replicate the east asian model of selling relatively high quality food for cheap. I don't know if that has changed in the US but in Canada convenience food/gas station food is still dire, but when I check out videos of the stuff you get in convenience stores in Japan and Korea, I get jealous. Cold, hot or microwavable meals that seem to compare favorably with most prepared meals from supermarkets here, and cost little because there's little need for staff except the one cashier. It would easily replace the "I don't care, I just want something convenient and decent tasting" instances of fast food eating.
Truck stops often have mini supermarkets with microwaveable meals at halfway reasonable rates, plus some combination of hot pizzas, pizza rolls, burritos, hot dogs, cinnamon rolls, fresh cookies, etc.
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I've heard good things about gas station food in the American South.
When I was in Minnesota, the best fried chicken was from the gas stations, it was actually better, cheaper, and in more convenient locations than established chains like KFC. Actually, we did largely buy trip food from gas stations there, both fried chicken, and things like burgers and breakfast sandwiches.
In the Southwest, there are gas stations serving Mexican and Pueblo food as well, I have bought some excellent breakfast burritos at a casino gas station. I don't end up buying it as much lately, probably related to the location of the good ones, and the age of my children -- they're of an age to know what a Happy Meal is, know what the Disney toy they're currently selling is, and be genuinely excited about that. They were genuinely excited about a six piece double sided puzzle in a happy meal the other day, and that it came in a metal box.
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Do you think there's anything immoral or counterproductive about the act of consumers raging against corporations for raising prices instead of just quietly changing their spending habits? Or is it a good idea, even if part of the momentum of the rage is driven by falsehoods about corporate greed instead of inflation?
It's probably a waste of time and emotional energy? If all the consumers rage and Netflix lowers the price a bit or lets geographically separated family members share accounts again, that's fine, I suppose. If there are that many people invested in using Netflix specifically, they can go ahead and wrangle over it. If viewers are very firm about not wanting to spend money on, for instance, a $120 million live action remake of Avatar the Last Airbender, then maybe they will comply. If people want that, I can't really tell. Maybe someday a YouTuber complaining about how lame Disney's new streaming show is will get more views than the actual show, and they will take action to make less lame shows (or at least not raise prices to fund the lame shows). I'm not betting on it, though. But the interaction is legitimate enough.
The Wendy's happy hours/surge pricing thing seems a bit silly, but if consumers would really prefer a small price hike all day long to a larger one at specific times, it might be worth letting the company know. And complaining on the internet and to reporters is one way to let them know, likely more effective than complaining to the workers at their local store, anyway. It's probably basically useless to complain about fast food price increases in general, since any given restaurant is pretty low margin and probably unable to lower costs.
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I think a relevant factor - socially if not economically - is the fact that Netflix (and to a lesser extent its competitors) basically used loss-leading prices and venture funding to kill off or hugely hobble cable television, independent studios for TV shows and animation, and other competitors to it's model.
Then once all the other sources of this type of media are dead in large part due to not being able to compete with Netflix's pricing model, Netflix raises the prices, and customers have no surviving good options to turn to.
This is not an unusual tactic - loss leading prices are common, tech firms cornering the market while losing huge amounts of money and then turning around to hike prices and degrade services to turn a profit are common. But it does in a very real way hurt the consumer by crafting a market that is hostile to their interests and is low on competition, where following their short-term interests harms their long-term interests in a way that's frustrating and hard to navigate.
Customers have every right to be mad about that, and honestly I think even non-customers have a right to be mad about what it does the media and the culture more broadly.
The "predatory pricing" idea is very bad business. If anyone reading this is the CEO of a company I'd highly advise against it.
I tried to go and find my post about it. I might have written it in response to you. Instead I just read all my top posts from the last year. I gotta say, I really like my writing. Need to feed it to a text generator and get more of it or something.
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I agree with /u/freemcflurry that there's still lots of competition- Netflix has not led to much infrastructure degradation, and people can switch back to the old model or a modern competitor without much difficulty. Plus there are still lots of alternatives to television- people can still see movies in theatres, buy blu-rays, read books, watch youtube and tiktok, hell even pirate shows and movies.
Netflix has not meaningfully "cornered" the market. No more than Blockbuster did anyway, and we all know how rapidly they fell.
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Are Fast Food Restaurants raising their prices or is it delivery services/delivery prices? I feel like after price increases last year FF seems like it's stabilized, but keep seeing some insane recipts.
Netflix was always in a race to eventually replace your cable company. Ultimately they may do that, but the end price will likely end up being pretty similar, too.
That's why the people who were pro unbundling thinking they could subscribe to just the channels they liked for the bundle price were dumb. If a channel with 80 million subscribers (because it's in a basic tier gets $.25 cents a month) goes to 2 million subscribers, it's going to have to raise prices to $10/month. So instead of paying $50 a month for 40 channels and watching 5, they'll pay $50/month for the 5 channels they watch.
The big thing cheaper netflix probably impacts is the amount of media licensed or produced for the viewers of Netflix.
I don't know if they still are, but I did notice some items I buy regularly increased in response to inflation. And there was a huge spat recently about Wendy's trying to implement surge prices, even despite Wendy's best efforts to frame it as discounts during off hours instead of higher general prices. My question was just about general price increases anyways- if costumers act together as a pseudo-monopsony in response to a fast food place raising prices, what would the consequences be? Just that fewer restaurants would be opening in the area since there's less profit? Might be a good thing tbh to have 5 restaurants in a food court that are all cheaper than having 10 that are more expensive.
Do you think the amount of media licensed/produced being lower is probably worth or not worth the lower cost?
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Large companies have zero incentive to reduce prices when they know that their competitor will do the same. McDonald’s has actually sued 12 of the major national meat suppliers for price-fixing simply based on the fact that each supplier knew the others’ pricing due to a shared analytic tool. All it takes is one reasonably intelligent analyst at the meat supplier board room to ask “so what happens if we lower our prices” for all to realize it’s an unprofitable move.
https://www.fooddive.com/news/mcdonalds-sues-meat-companies-pork-price-fixing/637572/
https://www.atg.wa.gov/news/news-releases/ag-ferguson-s-price-fixing-lawsuit-nets-105-million-washingtonians-tyson-foods
https://www.agriculturedive.com/news/agri-stats-sued-by-DOJ-for-role-in-meatpacking-antitrust-scheme/695196/
If you are McDonald’s and there’s a Wendy’s across the street, you have two options. You can both keep your prices high and split the pool of consumers 50/50, knowing that stressed American consumers will continue to buy your slop because it is time-efficient and they have formed a habit to your addictive slop. Or you can lower your prices, which the competitor will do next week, which leaves you back to the first option only with less profit. Of course they don’t do this. But if a brand new competitor moves in who doesn’t play ball, perhaps they will do this to squeeze him out — no new competitor can compete with the supply chain and the institutional knowledge of McDonald’s.
It’s an entrenched mythology of capitalism that companies lower prices based on competition. This hardly ever works in the real world. There’s no reason, for instance, for OnlyFans to rake in billions of dollars when anyone can create a similar site. But OnlyFans isn’t profitable because their service is better, but because the pornographer who operated it made the site a meme among the public (a kind of psychological rentseeking), because he had the previous institutional knowledge and capital to do this. And you see with car dealerships, there’s no reason for any used car dealership owner to make tens of millions. But in an intensive competition what they do is compete over psychologically manipulating the vulnerable, so the car dealerships compete over misleading pricing plans, overpriced itemization that the customer doesn’t have the knowledge to dispute, etc. It is horrifically inefficient and immoral as a system and it is only maintained due to various mythologies in the public imagination.
I'm pretty sure demand for fast food is much more elastic than you're suggesting. You can't use misanthropy as an excuse for ignoring the fact that consumers do respond to higher prices and firms respond by lowering them.
Why are you quoting me McDonald’s PR as if it means something? Are you going to quote me Wendy’s selling $1 burgers next, after their PR disaster of announcing a plan to do surge pricing?
They may as well continue doing this cycle, raising then lowering when publicity gets bad / people notice.
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Huh? Then why have the prices of wood, steel, food, electricity, computing power, plastic, televisions, phones, and literally every material good ever declined by orders of magnitude over the past four centuries? When we observe any specific one, what we see is that new, more efficient or productive techniques enter the market at lower prices and drive out higher priced competitors, over and over. What am I missing?
I think you could get there from a normal supply/demand relation, since efficiency raises supply?
There’s probably a labor theory of value explanation, too. It’d be funny if coffee was taking the Marxist tack.
Monopolists don't set prices to where supply = demand, they set prices to maximize their own profit, and there's deadweight loss because of the mismatch. But, yeah, prices would still decrease as efficiency increased. I think it gets weird when there are very large price differences involved and it'd depend on what the demand curve looks like exactly. My argument is more that we can observe competition driving the price decreases of all those specific goods historically.
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I agree there are some inefficient markets with deceptive pricing schemes, network effects that create effective monopolies etc. but the idea that this applies to food of all things is absurd. Yes, Wendy’s/McDonald’s are both highly priced now, so as a consumer I simply eat them less. I quite like fast food and if a quarter pounder with fries and a drink was $6 I would probably go to McDonald’s frequently when I didn’t feel like cooking, but it’s $12.29 (just checked) so I’ll get pizza for $2/slice instead
They frequently have coupons built into the app you can use. Also, often the drink prices are very inflated- you can save a couple bucks easily by using a reusable water, even if you just fill it with soda you bought at the grocery store.
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Restaurants are if anything, a great example of competition keeping prices low. Most restaurants have terrible profit margins and many of them fail.
Other good examples of industries with high competition and crummy profit margins - airlines, supermarkets.
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You're overselling it.
In many industries, competition is fierce to the point where no one is making any money.
For example, during the shale boom that started around 2010, U.S. oil producers plowed all of their profits back into expansion. U.S. oil production rose from 5 million barrels per day then to over 13 million today. But overproduction caused oil prices to collapse and many producers went bankrupt. Even the best-run firms have substantially underperformed the market. Today oil trades well below what it did in 2010, despite the prices of everything else going up a lot.
As a result you can buy the stocks of most oil and gas producers for a PE of less than 10 (compared to a PE of 50 for Costco). Even though they are profitable today, people expect that they will repeat the same mistakes a second time.
Some corporations stick it to the consumer and make big profits. Some don't care about money and just like to drill, baby, drill.
I am sure that there are lots of other industries like this too.
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So I take it you're a socialist or communist of some sort?
What do you think it is that stops McDonald's from charging $10 for a bottle of water?
They can’t charge an amount that is so noticeably higher that you remember it and buy a pack of water for 1/20th of the price at a store. But they can (and do) overcharge on water, understanding that they can get away with it because it’s an inconvenience for you to get it elsewhere. That’s extremely economically inefficient, because McDonald’s surplus profit goes disproportionately to already-wealthy individuals. (It’s better for a nation to have more people with more money, versus some with extraneous wealth that doesn’t provide any benefit in terms of happiness or entrepreneurship or invention or culture.)
It would be more efficient if, for super-sized corporations, an agency stepped in and “auctioned” off the corporate positions and ownership according to who will do the job for the least amount of money, then pass the saved money to consumers. If that’s too much government interference, then allow the employees to form powerful unions, because the employees are more likely to identify with the interests of the consumer and stand to gain less as individuals from purposeful economic inefficiency.
There are a lot of problems with communism. People should be paid up to 10x more than median wages for performance, because humans have an instinct to be rewarded according to performance, that’s deeply evolutionary. Humans also have an instinct to care for things they own, and you see this in small businesses and entrepreneurship. The answer is a balance that accepts the importance of human instinct while also realizing that primitive capitalism can get harmful, antisocial and inefficient. For large corporations, no one should feel like they “own” it, and these trend toward pseudo-monopolies due to institutional knowledge accumulation and established supply chains. For a problem like used car dealerships, we should have some kind of Honesty Regulation akin to Cicero’s grain merchant at Rhodes thought experiments. The policy should make it so that even a very dumb person can immediately tell that something isn’t in his economic best interest.
It's an inconvenience to get it elsewhere because billions of dollars have been invested in buying land, constructing physical buildings, paying for utilities, creating distribution networks, investing in facilities to produce the products you're buying, all for water and a thousand other products. One does need to pay for that investment.
I will be the CEO of every major company at the same time for $1. More generally, it's hard to pick a good board and CEO, and many companies that could've succeeded fail due to bad leadership. I think an agency choosing it would be even worse than the current system.
There’s a concept called “profit” and we look at profit when determining whether things are overpriced, not just gross expenditures
This has always happened. Even very highly paid corporate CEOs screw up companies.
(warning: citing graphs without understanding deeply where the numbers come from, but all that matters for this argument is the order of magnitude)
McDonalds's profit margin, averaged over the past decade, is like 24%. They'd, you know, rather it be 100%, but competition doesn't let them do that.
Mcdonalds is actually a high outlier in that regard because of the value of the brand, other fast food companies are lower etc. Again, this is competition manifesting, people are willing to pay more for a mcdonalds burger than a generic burger.
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Most fast food restaurants will give you a cup for water for free.
This is just wishful thinking. Look no further than dockworkers fighting tooth and nail against automation that would increase port throughput because there'd be less demand for their labor.
Dockworkers rightfully fight automation because they know that there are not other jobs for them with high pay as many other jobs lack unions; the “efficiency” goes to just a few at top. This is different from a scenario where unions are the norm across industries — suddenly the benefit of being a dockworker would not so large as to prevent them going through with automation. But even if for some reason dockworkers maintain a disproportionately high salary, we can imagine a system where the union of one industry negotiates (and can be overruled) by a broader “related-industry” or “affected industry” greater union body. There are many ways to incentivize efficient economic decisions which involve unions and cross-union negotiation.
This just evades the point, try again but for soda
No, when there's competition, it'll tend towards the efficiency going entirely to the consumer (insofar as we can treat efficiency as a thing, the units are probably not quite right), in the long run.
In the meantime, sure, it'll make a profit, but that'll trend to zero unless there's a reason for it not to, in an environment of competition.
Your point here was that "that's extremely economically inefficient, because McDonald’s surplus profit goes disproportionately to already-wealthy individuals."
First, we don't know that this would go to surplus profit. One benefit of higher priced sodas is that with that extra money, they are able to afford to lower prices for other things, meaning that it's not obvious that they're making much of a profit. Now, it was elsewhere pointed out that they are making a profit, (presumably due to a mix of people valuing the brand, and that the relevant measure is not nominal profit, but profit compared to the return of the next-best alternative for the investment used to set up the franchises, like the stock market). But profit going to wealthy individuals does not mean that it's economically inefficient! The measure of economic efficiency is not whether it leads to equality, but whether it leads to value production. And this system of allocation does lead to production of value, because there's now a bunch of McDonald's that we wouldn't have otherwise, providing food cheaply, that evidently, people appreciate, since they shop there.
And even if there isn't competition (which is not the case), well, it's still better than there not being any soda available for you to buy.
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He "evades" the point by offering directly contradicting evidence to your assertion? And then you literally move the goalposts by shifting the object from water to the substance that is single most responsible for the American pre-diabetic and diabetes epidemic.
This isn't just poor argumentation, it's a lack of understanding of the nature of consumer demand and vendor supply.
McDonald's continues to exist and generate profit because American (and foreign!) consumers really enjoy, and therefore demand, their product. Every time I hear someone go on about "the corporate overlords" I get a strong suspicion they've never worked in one of these large corporations. They're bureaucratic, slow, with pockets of poor management everywhere. Often, they're coasting on brand recognition and incumbent advantage. Sure, they may still have top line growth, but they're not innovating outside of buying potential challengers (see: McDonalds and Chipotle). The idea that there are these Gordon Gekko greed machines with incredible ability to manipulate the public is laughable. The lizard people don't exist.
The sad fact of the matter is that McDonald's CEO is a former soap salesman who did the handshakeful path of Harvard Biz School to Big Consulting. This is the kind of dude who looks forward to "networking with the family" for 45 minutes of Christmas Eve before diving back in to the sweet sweet womb of quarterly reports. He is a business nerd.
But you know who aren't business nerds? Construction workers getting their morning coffee, single moms too tired to cook, stoned teenagers, and (years ago) my drunk ass at 2 a.m. And we all like the convenience, predictability, and location density of McDonalds. And so we spend, together, billions of dollars on their product.
An auction. Yes. Like, perhaps, at a market. Like where people would buy and sell assets they own - their "stock" you could say. A kind of "stock market" if you will.
So we solve government interference by creating organizations that are intrinsically tied to the government.
What does this even mean?
Tell some undefined "truth" or you're committing a crime? George Orwell would like to see you in the hall.
This is just outlandish and I'm beginning to think I'm being trolled.
Eh, that's the main point that I have some sympathy to. I certainly expect some industries to be unethical and taking advantage of people, especially if they have poor self control or are less intelligent or senile.
Also, he wasn't the one that brought up high bottled water prices. I'm with you overall, though.
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How is it possible that you don’t understand that it evades the point? That’s shocking, because it’s a very clear case of arguing against the substance — which should never be done because it wastes time (hence my terse reply, and now I have to waste time clarifying something so simple). It’s not just bad argumentation, it’s damaging to the whole discussion because of that.
We are talking about the overcharging of goods with water as an example. The one example is not the substance of the argument.
If someone wants a bottle of water they should be purchasing it at a reasonable price. Tap water has nothing to do with the claim. It’s not always possible to drive with an open cup of water in your car, depending on cupholders and road conditions
If some locations allow free cups of water, what does this have to do with the locations which do not? Even if points 1 and 2 don’t apply, the simple fact that there are locations which do not give free water makes this whole argument a wasteful tangent. See here, here, here
it’s crucial to understand the difference between substance and trivial details
Are you trolling?
I will read the rest of your post if you can confirm that you’ve understood why you are incorrect per the above
I'm far too dumb to do that.
Is this why my pants are wet?
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Sure there are, they can learn to code. Or install air conditioners. Or...
The "efficiency" is reflected in higher prices for all imported goods. Poor people consume more of their income than rich people.
The dockworkers raise prices for every American. They simply do not care about this, contrary to your claim about the employees having the interests of the consumer at heart. It's classic diffuse costs and concentrated benefits.
The goalposts have moved very far indeed from "employees are more likely to identify with the interests of the consumer and stand to gain less as individuals from purposeful economic inefficiency". Now we need a union of unions to put down the unions who unionize too hard.
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How would private investment into companies work in your system?
Why wouldn't the store just raise their price to $5, colluding with McDonald's in a similar manner to how the Wendy's does?
Edit: P.S I think for the most part free markets are very effective and there are only a few areas where the government needs to intervene, such as carbon emissions. I am asking questions because I think you're very wrong, but I'm not yet entirely sure what the root causes of your mistaken beliefs are.
New businesses typically lower prices so that consumers try out their business, as consumer behavior is based around habits and attachment to routine — lower prices break this cycle. If you’ve noticed this is why newly opened stores have sales / deals. McDonald’s also may be over-pricing an item and at the same time a new competitor can’t compete due to economy of scale
Thy will have to invest based upon the idea that the business they invest in is actually valuable to society. If it is valuable then it will grow and profit for a period, and if the profits are too extravagant than the Government steps in — and this is a good threat because it makes investors vote for boards that lower prices themselves, lest the government step in.
Then this is better than if they didn't exist, and there were no economies of scale. They can't go below the threshold of what other competitors can compete at, so they have to be at least as good. Any better than that, and that's just free additional value to the consumer.
I'm guessing that investing in expanding the business, research and development, etc. etc. counts in the costs, and lowers profits? Because then many enormous companies operate without profit. If that doesn't count, then you're harming the companies, leading to less economic prosperity. Most companies don't pay out dividends. I imagine it would mostly be small businesses where they just take it as profit, but people seem not to like going after small businesses. Did you realize that it's them that you are targeting mostly?
Edit: That last bit is unfair; I haven't actually checked frequency of dividends.
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Okay, but how's that relevant to why McDonald's wouldn't set their price to $10, get the Wendy's to set the price to $10, and also get every other competitor in a large radius to set their price to $10?
Also, how does that square with how most of the McDonald's I've been to having the exact same prices, even if they're geographically in very different areas? I don't think I've ever once seen one lower its prices in response to a new restaurant opening up across the street.
Even if the private company earns so much profit by simply making an amazing product everyone wants to buy and can't produce enough supply to meet demand even when they try, e.g Ozempic or Nvidia?
Edit: Reading your responses and your replies to other commenters, I strongly recommend you go through the Khan Academy economics courses or another standard economics class. I think you'd learn a lot.
I appreciate your advice to look at Khan Academy. I will look for a cost-efficient reading comprehension program to suggest you.
That wasn’t in the reply I replied to. You are asking me why my explanation for X does not reply to the non-existent question Y. In fact, you asked Y three posts up, and to that I replied
Now clearly this answers your question as to why all fast food locations can’t arbitrarily raise their prices to infinity. They compete with grocery stores, which have more competition over prices due to the variety of bulk retail outlets, online grocery orders, and so on, and which the consumer plans trips to in advance. This is different from having a limited number of expedient food options near your work.
I have no idea, you could have googled it
https://www.huffpost.com/entry/why-mcdonalds-prices-are-wildly-different-from-one-location-to-another_l_65665af4e4b03ac1cd17b7d9
From the article:
Back to you:
We have to ask, (1) should the developer of Ozempic make as much money as possible, or (2) should the developer of Ozempic make approximately the amount of money that a reasonable developer would consider justifies his research. My position is the second one. (If this is too many words of commas let me know and I can rephrase). Imagine how evil it would be if the scientist who discovered penicillin tried to maximize profit.
You and @non_radical_centrist: stop this schoolyard nonsense.
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You never properly answered it so I asked again.
This is a proper answer. However, it contradicts with what you said earlier,
I don't see why McDonald's needs to lower prices to compete with grocery stores and bulk retail outlets, but not to compete with Wendy's.
I'll grant you that apparently I'm wrong and haven't travelled enough, or at least haven't documented enough McDonald's prices. But there's still nothing showing McDonald's locations lower their prices to shut down competitors then raise them again.
I think cases where IP is involved is complex. I agree that stumbling onto the right formula shouldn't be a license to print massive amounts of money for all eternity. I think people should get a few years to be very wealthy, then it should be simple for anyone else to use the same formula to join the open market. Probably shorter than what we currently have and definitely it should be simpler to get permission from the FDA to compete. But in the meantime before IP expires, the developers should get to make as much money as they want. That's how you properly incentivize people to search for amazing drugs instead of just good drugs, since if either way they'd just get enough money to incentivize looking, no one would look for harder but better drugs.
I'd like you to address nvidia too, since while they have a lot of IP I'm sure, a big part of why they make so much money is that no other company can make chips as good as them, even if they didn't have IP. If you limit their profit, they'd have no incentive to open another factory or research team, since they'd already have maxed out on money they can make.
Replying to a comment you make further down:
They aren't simply "psychologically manipulating" the public. The public can think for themselves. The public likes being expensive things to show off how hip(and wealthy) they are, they do it all the time. Diamond rings, luxury cars and watches and clothes, meals at pricey restaurants, art, wine. All those things might be better in some small ways than their budget competitors, but the vast majority of the price differential comes from people wanting to show off their wealth and taste. And if they want to show off their wealth and taste, someone will inevitably sell them the opportunity to do so.
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This is just where we arrive at a differential in positions on economic theories. My wager is that if there had been a substantial profit motive, industrial manufacturing would have started up more quickly. I don't think there is a plausible case for patenting the relevant molecule, since it can be isolated from naturally occurring molds, just the industrial processes used to manufacture it in large quantities. Here's the summary of that development where manufacturing at scale wasn't feasible until Pfizer developed the process for doing so.
To the extent that IP laws could have allowed monopolization of penicillin or regulators could have prevented competition by not allowing different companies to manufacture penicillin, these are complaints about government regulation rather than profit motive. While there are market failures, what we mostly find in competitive markets is that prices come down and goods become broadly available. Despite the object-level complaints on the price of McDonald's in this thread, pretty much everyone can afford a Big Mac and almost no one thinks that the situation would improve if governments were responsible for the manufacture and distribution of burgers.
To the Ozempic example, the ability to profit-max outside the bounds of what most would consider ethical is a product of regulatory capture, not a unique process for creating semaglutide that no one else can match.
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