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Well, in another thread, now closed, about a Kroger employee being attacked by a customer, the topic of how that event would raise prices, which led to a discussion of price elasticity.
My position is that Kroger is a $137 billion operation, and a $1 million dollar (I'm guessing that would be the max..) settlement is not large enough to change the price of a can of beans by a penny. In fact, having spent years doing budgets and pricing proformas for a multiple billion dollar company, I'm sure that Kroger anticipates such events, and as such the costs are already baked in the cake so to speak. We predicted, based on past history, such things as customer law suits,, employee injury lawsuits, delivery vehicle accidents and related settlements, etc. This particular event is not outside the norm for a company as large as Kroger. You don't know when or where or how it's gonna happen, but you know it will.
True, a million dollar whack to a local mom and pop would have an effect, but not to a company the size of Kroger
If there is no price change, what is the elasticity?
p.s. And yes I also taught Econ at a local University, so I know how the formula works.
If it happens enough Kroger may close the store. Same deal if the employee is trying to discourage theft. Each store must make profit.
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