Re:Why Does a Plastic-Wrapped Turkey Sandwich Cost $15 at th...
by ajmurmann on Saturday April 15, 2023 @08:02PM
(#35585903)
This seems true, since McDonald's prices inside an airport seem to be either three danger as outside or just a little more. They for sure never reach the astronomical heights of other airport vendors.
But that's correct. The rent charged by the airport has no impact on prices inside the airport. They are high because of the captive audience.
Store revenue within the airport is determined by customer willingness to pay. Willingness to pay does not take store rent into account; it is a function of prices and alternatives. So the stores set prices at the level that maximizes revenue, and the rent charged by the airport is a fight between the stores and the airport over who gets how much of the revenue. If you limited the amount of rent the airport could charge, the first-order effect would be that prices would stay exactly the same, the airport would get less money, every store would get more money, and customers would be completely unaffected.
If you wanted to return money to the customers, you'd need to increase the level of competition between stores.