alt Hacker Newsokay but why? cost of living is less in america's burbs too. you are getting cause and effect reversed: the huge chain stores and PE firms, they are very efficient, i mean that's why they grow so big, and being efficient is strongly associated with lower prices.
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andyferris • today at 6:31 AM
PE firms are efficient... at maximising equity. A good example of what they do is find the maximum viable price consumers will pay.
A small business might be less accurate - figure out a "reasonable rate", and therefore charge less.
In stuff like restaurants though it translates to increased margin not lower prices. Mom and pop restaurant margin is like a few percentage points if you are successful. Some franchises sniff 10 even 25% for say a chic fil a.