Sunday, March 1, 2009
Price of Beer
I'm out with some friends at a bar the other night and buy a beer. I get back to the table sit down and my friend asked me what I got. I say," a beer, an overpriced beer but a beer" to which he replies, "yeah it's $9 beer night". Now this got me thinking about why are we willing to spend this much money on beer. For example, a bud light bottle at a bar costs $3.25 usually $4 with tip but a 12 pack costs $9.99 with tax that's less than a dollar a beer yet we are willing to pay about 4 times as much. This could be for a couple of reasons in my opinion. First it could be that we are paying for the atmosphere and we are willing to pay this much for the drinks so a simple case of supply and demand blah blah blah or it could be sunk cost. Is it that we think wow this is expensive but I'm already here, I've spent all this time getting ready and walking here so I might as well pay it even though you could easily go home with your friends and drink there. We are to lazy to move so instead we spend excessive amounts of money or expendable goods and raise our credit card bills all for overpriced beer. Maybe this is just my friends and I but I guess that's how we roll.
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Expanding on your point of overpriced beer as paying for atmosphere, theres a couple of examples which come to mind proving that that's the real cause. First, social clubs such as the eagles, moose, elks, and the VFWs, all subsidize the price of drinks through member dues. Although it's not for profit in nature, they end up using dues to subsidize the fixed costs (rent, licenses, utilities, staff), while the variable costs (drinks) are sold at cost. This could be an idea for a campus bar, where you could pay to become a member at the beginning of the year, and then the beer there happens to be extremely cheap (close to at cost, but still mark up a bit) so that it wouldn't penalize the real alcoholics out there, and just the teatotalers. Another example of this was on new years, McFaddens had a $75 admission fee, all you could eat and drink from 6 pm through 2 a.m. No one that planned on drinking one or two beers thought it was a good deal. While my friends who are AA members, were salivating planning to drink McFaddens to bankruptcy.
ReplyDeleteThis might be a good idea to expand from just New Years to year around, or at least 9 months.