First of all, it is the story of milk coke and economics. Why is milk sold in a square box and coke sold in a round bottle? Because of the different shapes of containers, they have different cost benefits, which is the core of economics. In this regard, the author gives an explanation that square containers can use shelf space more economically than cylindrical containers. One of the reasons why soft drink manufacturers insist on using cylindrical containers may be that most of them drink directly from the container, and cylindrical containers are more hand-weighing, which offsets the extra storage cost it brings. This is not the case with milk. Most people don't drink milk directly from the box. Even if they are drunk in boxes, the principle of cost-effectiveness shows that they are unlikely to be sold in cylindrical containers. Because square containers (no matter what they contain) can really save shelf space, and the space saved in the case of milk is obviously more cost-effective than soft drinks. Most soft drinks in supermarkets are placed on open shelves, which are cheap and usually have no operating costs. However, milk needs to be specially packed in a freezer, which is expensive and has high operating costs. Therefore, the storage space in the refrigerator is very valuable, which improves the income of milk in square containers.
Do you have an epiphany after reading it? It turns out that economics is so close to our life, but we are unaware of it. There are countless such examples in the book, and several of them impressed me the most. Although the explanation in the book is only the author's subjective view, it does give us a lot of inspiration and inspire us to think about the problem from multiple angles. You can also give your own opinions.
Why do many bars charge for drinking water, but offer free peanuts?
Some bars sell a glass of water for four dollars, but salted peanuts can be asked for at will. What the hell is going on here? The core product of the bar is alcoholic beverages. Peanuts and wine are complementary. The more peanuts drinkers eat, the more beer or liquor they want. Providing peanuts for free can improve the profit of the bar. On the contrary, water and wine are substitutes for each other. The more water drinkers drink, the less wine they order. The bar can set a high price for it, and it can also discourage customers from consuming water.
Why are waiters paid more than assistant chefs in high-end restaurants? In high-end restaurants, a waiter can earn hundreds of dollars a night just by tipping, while the assistant chef in the same restaurant only earns dozens of dollars. Most people must think that an excellent assistant chef needs much more skills than being a good waiter. Then why do waiters earn much more? The assistant chef's job provides the necessary training and experience for the promotion of the chef. Chef, on the other hand, is a respected and well-paid profession. On the contrary, the waiter is an ultimate position. Many waiters can no longer step into higher-paying jobs. Even if some do, their success has nothing to do with being waiters in the past. Many jobs that require skilled skills have relatively low wages because they are stepping stones to their favorite jobs. The position of assistant chef falls into this category.
Why do many schools require students to wear school uniforms?
When many people go to school, they think that it is a basic right to wear whatever clothes they want. However, when they became parents, the same group of people began to support the practice of requiring students to wear school uniforms. Because the requirement of wearing school uniforms reduces the money and emotional costs that students invest in clothing competition.
Why do Japanese couples spend more on weddings than American couples?
To celebrate their marriage, Japanese couples spend twice as much on average as American couples. Although the cost of entertaining each guest in Japan is higher than that in the United States, the main reason for such a huge cost difference is that Japanese couples often invite more guests. They usually invite colleagues, bosses and other members of the community to attend the wedding, and the interpersonal network covers a wide range. Local politicians are often invited, even if they don't know them at all. Even for a middle-income couple's wedding, the guest list is mostly between 300 and 500 people. Part of the reason why Japanese couples spread such a vast interpersonal network is that Japanese society relies heavily on informal social and business networks. If people who think they should be invited are not invited to the wedding, it is likely to bring great social obstacles and endanger the status of the parties. Of course, this kind of network also exists in the United States, but it is far less important than Japan.
Why is it much cheaper to get close to a brand-new used car than a new one?
Once the new car leaves the dealer's parking lot, the price immediately drops by more than 20%. Nowadays, the service life of cars is generally over 200,000 miles, so why can a few more miles on the odometer make the price of cars drop sharply? Due to the different manufacturing and assembly processes, the reliability of different cars is not exactly the same when new cars are off the assembly line. This difference in reliability is amplified by the difference in car maintenance between different car owners. Although some used cars are new, they are defective, and sometimes even professionally trained maintenance technicians may not be able to braid them. Owners generally know more about the condition of used cars than potential buyers. Information asymmetry has a great influence on the price of used cars. Therefore, unless there is a big discount on the price of used cars, no one will want to buy them.
Just as there are 1000 Hamlets for every 1000 readers, the answers are always varied, but "Milk Coke Economics" only teaches you to look at all the business problems that make you puzzled with the "colored glasses" of economics, and it will always make you suddenly realize from some angles. To sum up, there are only three sentences: to make a choice, we should consider the principle of cost-effectiveness, remember that there is no free lunch when encountering opportunities, and the ups and downs of the market are always inseparable from the relationship between supply and demand. Furthermore, the pursuit of profit maximization is the sole purpose of businessmen.