Festive price hikes still in place at some coffee shops. They make them permanent, citing rise in costs of labour, rent and food items." The Straights Times 13 Feb 2014
The 10 cents increased in coffee prices always lead to hot debates among Singaporean as one of the favourite pass time in Singapore is "la Kopi" (at least I am doing this every morning with my wife after sending my children to school).
Well, according to the basic economics that you have learnt in JC Economics syllabus, there are many coffee shops in Singapore and the PED for one shop should be relatively price elastic, thus any attempt for one shop owner to raise prices will lead to more than proportion fall in the quantity demanded and resulted in lower revenue! Wa, so the owners have make a wrong business decision!
May be not!, some of us have this special feels about the coffee/tea from this specific stall. You see? The coffee shops are able to provide differentiated products and thus able to charge a "premium" price! Or it could be "Just 10 cents! no big deal la" mentality of the consumers?
Anyway, it is only fair for the coffee shops to raise prices to justify higher cost of production, which is a rising concern for all retail businesses in Singapore. Are we prepared for a slightly higher inflation rate in the coming year? Well, we still have a choice of la kopi at home :) which is much cheaper!
The 10 cents increased in coffee prices always lead to hot debates among Singaporean as one of the favourite pass time in Singapore is "la Kopi" (at least I am doing this every morning with my wife after sending my children to school).
Well, according to the basic economics that you have learnt in JC Economics syllabus, there are many coffee shops in Singapore and the PED for one shop should be relatively price elastic, thus any attempt for one shop owner to raise prices will lead to more than proportion fall in the quantity demanded and resulted in lower revenue! Wa, so the owners have make a wrong business decision!
May be not!, some of us have this special feels about the coffee/tea from this specific stall. You see? The coffee shops are able to provide differentiated products and thus able to charge a "premium" price! Or it could be "Just 10 cents! no big deal la" mentality of the consumers?
Anyway, it is only fair for the coffee shops to raise prices to justify higher cost of production, which is a rising concern for all retail businesses in Singapore. Are we prepared for a slightly higher inflation rate in the coming year? Well, we still have a choice of la kopi at home :) which is much cheaper!
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