Tpjcians Are Still Patronizing Good News Cafe Despite Rising Prices

According to our web poll, Tpjcians are still burning their pocket money on food and beverages offered by Good News Cafe. This is quite an interesting finding, considering the fact that the food and drinks sold at Good News Cafe bear a heavier price tag given a smaller bite size. I expected a landslide 'victory' for John Cafe, bearing in mind that the canteen stalls prepares a more hearty meal with similar price increments as its competitor - I was proven wrong. Below is one reason why students continue to consume the food and drinks provided by Good News Cafe despite the rising inflation.

Price inelasticity
The sandwiches, ice blended drinks and even hot dogs served by Good News Cafe is becoming more price inelastic. This means that an increase in the price of the food and beverages sold in Good News Cafe brings about only a smaller than proportionate decrease in quantity demanded of the food and drinks. This is primarily due to the fact that there are no close substitutes available.

For example, although John Cafe do sell sandwiches at a cheaper price than the ones sold in Good News Cafe, the quality of the latter is twice as good as its rival. Some students argue that the sandwiches from Good News Cafe fills their stomachs more readily than the ones provided by John Cafe. Others commented that the Cafe sandwiches give a sense of exclusivity to the students. Somehow, the triangular plastic containers seem more appealing to them than the flimsy ones. Moreover, several Tpjcians also highlighted that the Cafe sandwiches are more healthier that the ones sold in the canteen. Each sandwich is prepared with at least two slices of tomatoes and lettuce. All these have not only enticed Tpjcians to purchase the Cafe sandwiches, but stretched the degree of substitution of the sandwich itself.

Another possible reason why students still flock to the Good News Cafe is the ice blended drinks sold there. The drinks are so popular that the owner has introduced a promotion early this year, whereby you can redeem a free drink after collecting a number of stamps upon purchase. The drinks are price inelastic due to the lack of close substitutes. Students no longer leave the school to purchase the ice blended drinks from nearby bubble tea shops. Instead, they prefer to buy the drinks from the Cafe for convenience. Convenience is a key factor now as students are making sure they spend most of their time to revise their work as examinations are approaching. Furthermore, the opening hours of the Cafe stretches until 6pm or above, therefore allowing students to enjoy the drinks during the CCA trainings. And most recently, discount coupons are also given to Tpjcians who choose to study late in school. All these measures have successfully diminished the degree of substitution of the drinks provided by the Cafe. Hence, students still consume them despite the price increase.

And oh yeah, who can forget 'Tantalizing Tuesday'?


Anonymous said...

The service also counts.

james said...

yes. tantalizing Tuesday!!!!!!!!!!!!!!!!!!

Anonymous said...

price increase? increase by how much and which items are affected?

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