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Originally Posted by CoccoBill
No.
Yeah, yeah it is.
Yes, assuming that the price increase does indeed raise revenues, and not lower them.
Seems like an obvious and trivial assumption. People don't choose schools merely based on what's cheapest. If that were true, then there would be no such thing as private schools, since public schools are free! School selection is based on a myriad of other choices, which are likely to factor more heavily into a decision than a small price increase.
Also, Price elasticity is a thing. Banks will try to get you set up with auto-pay for your bills and a bunch of other integrated services so that it becomes a monumental endeavor to change banks. Then they jack up the ATM fees when you're not looking. I imagine that effect would be much more intense when we're talking about children, who have formed relationships with teachers and classmates.
In that context, a price increase is unlikely to reduce revenue.
The only one suffering are the customers, who pay more for an identical product. No appeal to morality, just an observation.
If you're not trying to appeal to morality, don't use words like "suffering". Bullshit ploy. Businesses experience rising costs for their materials and labor all the time. Those costs get passed onto consumers all the time. It's called an economy, not the "why isn't he world exactly how I want it" game.
Now you're fabricating reality.
Preposterous.
It makes no sense to reinvest if you're already making sufficient profits.
This just demonstrates that you know zilch about business. Where did you hear that businesses ever use terms like "sufficient" when talking about profits.
It's totally common and natural for a company to invest money in measures that attract more revenue, even in times of prosperity.
If you're not, we've already exhausted option 1), which this is
How? Where in this ridiculous fabrication of nonsense did you stipulate that we can't raise prices?
Why would you do this, when cutting costs accomplishes the same with lower expenditure?
Because quality, brand, reputation, and service are all things that matter.
The point is, that improving the actual product seems to make the least economical sense, that's the last resort. R&D, improving manufacturing processes, better QC etc. are costly as shit, take a long time and still don't guarantee better sales
Cutting costs doesn't guarantee against a loss of sales. For every action, there's a reaction. What's your point?
So explain how a state-run institution would do it better? They have no profit motive, but are still motivated to reduce costs. In that scenario, why would they EVER in a million years consider reinvesting money into the quality of their product? Their decision tree has one branch....cut costs.
This is why it's pretty much a proven economic certainty that competition improves quality and lowers prices. Remove the competitive aspect and you have a beached whale of a business.
I haven't said anything about results or what anyone's gonna do, I've looked at the incentives. The rational move is to minimize expenditure and maximize profits.
Why do you equate a minimization of expenditure with a degradation in quality? Is it possible that a business spends money on frivolous things? Is it possible that there is fraud, waste, and abuse occurring within the business? Is it possible that a reduction in costs could improve the quality of education?
You could possibly gain more relative profit using a more costly method, but that seems to incur more risk, which again makes no rational sense.
In what universe is the goal of businesses to avoid any and all risks? Do you fold everything but the nuts in poker? It's perfectly reasonable for businesses to assume risk if the potential rewards justify it.
To me it looks like improving the product comes last down the list. All the adding of the price hikes to the decision tree does is drop the product improvements further down the list.
Jeeeeezus! Did you go to public school or something!?
Look at the list again. By adding price increases to the list, you have options to generate capital that finance growth, expansion, and improvements. And then way down there at the BOTTOM of the list, is cost-cutting and quality-lowering.
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