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  1. #561
    Quote Originally Posted by Diurdi View Post
    What's "perfectly elastic" supposed to mean? Ideally, businessmen raise their prices until 1% increase in prices result in 1% drop in demand (price elasticity of -1).

    Either way, an increase in prices will lower demand, the question as I said is: how much? More or less than 1%? I think it's an insult to his intelligence to think that his price elasticity is above -1 (between -1 and 0), and that ACA forcing him to raise prices will actually increase his profits.
    Perfect elasticity is where a 1% increase in prices will result in a 1% decrease in demand.

    It doesn't actually happen like that. Economics is a social science, not an exact one. PED is a great way of explaining behavior in the market, not predicting them.

    If PED were perfectly accurate then a decrease in the price of a good to 0 would result in infinite demand while an increase in the price of a good far beyond its fair value (Say, $10,000 for a pizza) would result in no one buying it, rather than the predicted "very few".

    A .7% increase in prices won't necessarily result in a .7% decrease in demand.

  2. #562
    Deleted
    Quote Originally Posted by Laize View Post
    Perfect elasticity is where a 1% increase in prices will result in a 1% decrease in demand.
    I've never heard it called perfect elasticity, but whatever.

    Quote Originally Posted by Laize
    It doesn't actually happen like that. Economics is a social science, not an exact one. PED is a great way of explaining behavior in the market, not predicting them.

    If PED were perfectly accurate then a decrease in the price of a good to 0 would result in infinite demand while an increase in the price of a good far beyond its fair value (Say, $10,000 for a pizza) would result in no one buying it, rather than the predicted "very few".

    A .7% increase in prices won't necessarily result in a .7% decrease in demand.
    Preaching to the choir.

    The problem I see with his comments is the following: Presumably he has raised prices to such a point that he believes creates the highest returns for him. A new cost emerges that will squeeze his margins. So, if he thinks raising prices will actually help him, why the fuck hasn't he already done so - before ACA?

    The only possibility is that ACA increases the cost of all his competitors as well. In that case the higher cost of doing business would be pushed onto consumers. How many of his competitors will see costs increase due to ACA? Will they increase more or less than for Papa John's? Those questions will determine the winners and losers.

  3. #563
    Quote Originally Posted by Diurdi View Post
    I've never heard it called perfect elasticity, but whatever.

    Preaching to the choir.

    The problem I see with his comments is the following: Presumably he has raised prices to such a point that he believes creates the highest returns for him. A new cost emerges that will squeeze his margins. So, if he thinks raising prices will actually help him, why the fuck hasn't he already done so - before ACA?

    The only possibility is that ACA increases the cost of all his competitors as well. In that case the higher cost of doing business would be pushed onto consumers. How many of his competitors will see costs increase due to ACA? Will they increase more or less than for Papa John's? Those questions will determine the winners and losers.
    Has it occurred to you that, maybe, Schnatter isn't a very educated man and has a more intuitive understanding of business, rather than practical? Richard Branson is a high school dropout with dyslexia and poor academic performance while, at the same time, being an entrepreneurial savant worth over $4 billion.

    John Schnatter seems to be Richard Branson if you toned down the genius and creativity and gave him an American, Republican midwest upbringing.

  4. #564
    Deleted
    Quote Originally Posted by Laize View Post
    Has it occurred to you that, maybe, Schnatter isn't a very educated man and has a more intuitive understanding of business, rather than practical? Richard Branson is a high school dropout with dyslexia and poor academic performance while, at the same time, being an entrepreneurial savant worth over $4 billion.

    John Schnatter seems to be Richard Branson if you toned down the genius and creativity and gave him an American, Republican midwest upbringing.
    Sure, Schnatter may be uneducated but his CFO probably isn't. I guess his threats are either empty (i.e. his CFO will tell him not to raise prices) or they're the result of everyone else having to raise prices making a price raise for him worthwhile as well.

  5. #565
    Quote Originally Posted by Diurdi View Post
    Sure, Schnatter may be uneducated but his CFO probably isn't. I guess his threats are either empty (i.e. his CFO will tell him not to raise prices) or they're the result of everyone else having to raise prices making a price raise for him worthwhile as well.
    Paul Broun is a medical doctor who doesn't believe in embryology. Schnatter is a man whose cute advice for success is "Keep your eyes on the pies". I wouldn't put it past him to be able to find a CFO that gives retarded advice that uses an excuse to lean right.

    The alternative is that maybe they have good reason to think $.15 will be a detrimental increase in the price of their pies. Maybe they do.

    As a non-1% member of their target demographic, however, I disagree. In that regard, I can absolutely say I know more than them. $.15 would affect my or anyone's choice whether to buy a Papa Johns pizza.
    Last edited by Laize; 2012-11-14 at 11:12 PM.

  6. #566
    His 10 cents number isn't even terribly accurate given his claims on how much it will cost in total if you make some necessary assumptions

    But either way, if its 10 cents or 3-5 cents as the article posits, as Laize points out markets aren't perfectly elastic and I see no reason it will do anything to demand.

  7. #567
    Bloodsail Admiral ranku's Avatar
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    aren't these practices technically illegal due to firing without reasonable cause?
    Quote Originally Posted by ohshift View Post
    Mess with someone's head enough, you can turn a scared little kid into an all powerful bitch.
    only two things are infinite the universe, and human stupidity,
    and i'm not too sure about the universe -Albert Einstein

  8. #568
    Quote Originally Posted by ranku View Post
    aren't these practices technically illegal due to firing without reasonable cause?
    Mass layoffs because a company wants to cut operating expenses are perfectly legitimate reasons to terminate someone.

    Schnatter is just an idiot in thinking a $.15 price hike will stop anyone from buying his pizza.

  9. #569
    Bloodsail Admiral ranku's Avatar
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    Quote Originally Posted by Laize View Post
    Mass layoffs because a company wants to cut operating expenses are perfectly legitimate reasons to terminate someone.

    Schnatter is just an idiot in thinking a $.15 price hike will stop anyone from buying his pizza.
    im just saying, the reasons he is giving don't sound like reasonable cause and it doesn't seem like something he can back-peddle away from.
    Quote Originally Posted by ohshift View Post
    Mess with someone's head enough, you can turn a scared little kid into an all powerful bitch.
    only two things are infinite the universe, and human stupidity,
    and i'm not too sure about the universe -Albert Einstein

  10. #570
    Quote Originally Posted by ranku View Post
    im just saying, the reasons he is giving don't sound like reasonable cause and it doesn't seem like something he can back-peddle away from.
    Well it might not seem right, but it's perfectly legit to fire someone because policy will make it so you can't afford them.

    What would be nice is if he weren't using politics as a scapegoat to turn him into a "reluctant" asshole.

    If you can't afford to keep people on, fine. Own up to it and say "Due to budgetary changes we're forced to lay off X number of people". Don't say "Due to Obamacare we're going to have to lay off X number of people".

    That's just fucking stupid.

  11. #571
    The Insane Masark's Avatar
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    Quote Originally Posted by ranku View Post
    aren't these practices technically illegal due to firing without reasonable cause?
    No. Welcome to "at will employment" and self-regulation. You can be fired at any time and no reason need be given. In exchange for this precarious state of affairs, you theoretically can quit at any time (but you better give 2 weeks notice if you don't want to be blackballed).

  12. #572
    Quote Originally Posted by Masark View Post
    No. Welcome to "at will employment" and self-regulation. You can be fired at any time and no reason need be given. In exchange for this precarious state of affairs, you theoretically can quit at any time (but you better give 2 weeks notice if you don't want to be blackballed).
    Yes, "at-will" employment is so fucking terrible.

    Employees and employers both have rights. An employee has the right to not be discriminated against. An employer has the right to not pay for employees he can't afford.

    If Schnatter doesn't think he can afford employees he's well within his rights to fire them.

  13. #573
    Quote Originally Posted by Greeney View Post
    How the hell does someone who sells such shitty pizza get a house that big? Holy shit USA, start eating at a local pizza place. It's not like pizza is expensive.
    I always see people say this, and yet I've found one good 'local' pizza place. Most places are stuck being local for a reason (and it's that they taste like shit).
    By Blood and Honor We Serve!

  14. #574
    Quote Originally Posted by Lightfist View Post
    I always see people say this, and yet I've found one good 'local' pizza place. Most places are stuck being local for a reason (and it's that they taste like shit).
    Of all the places I've had pizza, and I've had a lot, the worst pizza I ever had was the Papa Johns I had at Six Flags. Only time in my life I was grateful a slice of pizza was so small.

  15. #575
    Quote Originally Posted by Lightfist View Post
    I always see people say this, and yet I've found one good 'local' pizza place. Most places are stuck being local for a reason (and it's that they taste like shit).
    That's because, despite what anyone will admit, the only good local pizza places exist in the American Northeast.

    I've had pizza in many other places (not california but yes in europe) and nothing compares to a legit new york deep dish. Better milk in Europe can go fuck itself, I can't taste the difference.

  16. #576
    Deleted
    Quote Originally Posted by Erenax View Post
    People are surprised by this? If you increase the costs of doing business, it's usually the customers or the employees (or both) who pay the costs.
    then we should increase the income tax for the top bracket to teach them a lesson

  17. #577
    Quote Originally Posted by Greeney View Post
    Of all the places I've had pizza, and I've had a lot, the worst pizza I ever had was the Papa Johns I had at Six Flags. Only time in my life I was grateful a slice of pizza was so small.
    I've never had Papa Johns but I have had Dominos' 1.0.

    That shit was terrible. It was like if they spread a cardboard disc with tomato ketchup and dropped some USDA rejected cheese on it and covered the whole thing with salt to mask the flavor.

    It was so bad that the next time I went over a friend's house and they said they were ordering Dominos I told them I'd already eaten. Truth was I hadn't actually eaten that day and it was 2 AM before I finally had some food.

    ---------- Post added 2012-11-15 at 01:37 AM ----------

    Quote Originally Posted by undercovergnome View Post
    then we should increase the income tax for the top bracket to teach them a lesson
    I hear raising taxes on a group of people because a minority of them "needs to be taught a lesson" is a sane course of action.

  18. #578
    Quote Originally Posted by Laize View Post
    I've never had Papa Johns but I have had Dominos' 1.0.

    That shit was terrible. It was like if they spread a cardboard disc with tomato ketchup and dropped some USDA rejected cheese on it and covered the whole thing with salt to mask the flavor.

    It was so bad that the next time I went over a friend's house and they said they were ordering Dominos I told them I'd already eaten. Truth was I hadn't actually eaten that day and it was 2 AM before I finally had some food.
    I feel like you're exaggerating. I've had Domino's pre-revamp, and it wasn't nearly that bad. It was shit, don't get me wrong, but it wasn't what you described.

    The only place I've ever had what you described (no exaggeration) was at a roller rink when I was 12.
    By Blood and Honor We Serve!

  19. #579
    Quote Originally Posted by Laize View Post
    I've never had Papa Johns but I have had Dominos' 1.0.

    That shit was terrible. It was like if they spread a cardboard disc with tomato ketchup and dropped some USDA rejected cheese on it and covered the whole thing with salt to mask the flavor.
    That's how I felt after eating Papa John's 2 years ago, just without the salt. Didn't digest it well either.

  20. #580
    Yeah, pre-revamp Dominos wasn't literally inedible, it just tasted about the same as shitty freezer pizza.

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