If a business cannot adapt to new economic conditions (And guess what, at some point along the line taxes are going to need to be overall increased no matter what, if the US wants to get out of its deficit hole), than it will fall out. Its a natural part of owning a business in a dynamic world. Adaptability = survival. How do you think Microsoft got to where it is?
1. Papa "john" is a d-bag by himself. You should read up on him if you havent.
2. Papa Johns is the only pizza sold at NFL games now. He is making boatloads of money.
Boycott that pos
Food costs in general have gone through the roof (even before the election & not all even remotely connected to health care), so if the price is ONLY increasing by 10 cents, while rival products are doubling or tripling... its far from 'certain' that demand will be lower.
Remember that even among their direct rivals, they will be reacting to the same cost increases "from Obama's re-election", so that doesn't affect them negatively at all.
Heck, even the 50 cent candybars from a year or so back are going for a buck now. thats a heck of a lot more of an increase then 10 cents on a $10 pizza.
id have to see it to believe it. most people wouldnt stop to pick a dime, let alone hesitate to spend one on something they wanted. if it was a relevant amount i could see it, but that amount is simply nothing
as it is, business has been decreased by my orders. voting with my dollar, just as all the free market types keep suggesting
What would be your best estimate?
What do you think effects demand more? A ten cent price increase on a pizza, or political posturing because your butthurt that Obama won?
All he had to do was come out and say, Papa Johns is raising the price of their pizza by ten cents. We are doing this to comply with the new health care mandate, and we think its a great that all our employees will finally have access to basic healthcare.
Instead of boycotting, people would be supporting his business.
Has this guy ever heard of public relations before...
It is difficult to free fools from the chains they revere.
I find it very hard to believe price and demand are perfectly elastic.
Everyone has a price they determine to be "a small change". This is how Farmville and the Apple App Store rake in cash hand over fist. People don't consider their apps to cost a lot of money even though they objectively cost between 8 and 35x as much as this papa johns pizza increase.
I don't think a 15 cent price increase will harm their model.
in spite of all of these claims to the contrary, this was never about business. this was a public hissy fit that he didnt get his way. as someone else mentioned, he was most likely going to a walmart style employment model either way, and this was a chance to throw a cheap shot in the process.
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.
Last edited by mmoc43ae88f2b9; 2012-11-14 at 10:21 PM.
I think they'll be fine.
Like I said, others will come out and say similar things. Maybe more subtly though.
He was just the first. So all the hate goes on him.
---------- Post added 2012-11-14 at 05:20 PM ----------
I imagine the relationship is exponential.
But yes, however small it may be, it will exist.
There is no minimum threshold or anything.
It was the lack of subtlety that made it a poor decision. If both Papa Johns and Dominos are forced to let employees go to maintain costs, and Papa Johns makes a huge announcement out of it while Dominoes does it quietly, than between the two Papa Johns will suffer since public perception is a large part of competing in a free market. If you have to do something unpopular, do it more quietly than the person next to you.