Thursday, March 22, 2007

More McD's--in fact, double

From Ezra Klein, an intriguing question in the nascent field of burgernomics:

A cheeseburger at McDonald's is 99 cents. A double cheeseburger is...100 cents. I can't figure out how this is economically advantageous for McDonald's, and nor are any of my friend's explanations proving persuasive.

He gives you the friends' theories, too. And he's right about them. The comments section below the post, however, gives us, if not a definitive explanation, at least a few gems of burgernomic wisdom. 1):

I think this is the breakdown for each transaction:

Single cheeseburger:
employee salaries - 5 cents
bun - 2 cents
cheese - 1 cent
pickles, ketchup, mustard - 1 cent
meat - 1 cent
McDonald's advertising budget - 89 cents

Double cheeseburger:
employee salaries - 5 cents
bun - 2 cents
cheese - 1 cent
pickles, ketchup, mustard - 1 cent
meat - 2 cents
McDonald's advertising budget - 89 cents

Ha, but uh, where's the profit? Oh, never mind. 2) "In order to be more 'health conscious', [single-burger buyers] becomes less sensitive to the fact they're getting hosed." 3) Because the drinks and fries are where the money's at, "The dollar menu items are the pawns of the operation. There's no such thing as half a pawn." 4) "What I want to know is how Little Debbie stuff is so cheap. Actually, I probably don't want to know. They're probably made out of the workers, or something..." And 5):

maybe there is a kickback from astra-zeneca on each big mac sold...as it will be leading to another lifetime consumer of the little purple pill. yum. a big mac, an order of fries and some fluff for dessert with a prilosec on top.

Posted by Evan Hughes at 04:47 PM

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