Is inflation over 11%? It is here. And I wonder what effect the price increase will have?

Sandwich board outside The Pizza Stop, Seymour Street, Vancouver, BC

Business students learn about the 4Ps of marketing in their first marketing class. Of the 4Ps; product, price, promotion, and place, price is the one that consumers notice first.

At this pizza place the price for two slices and a can of soft drink has just gone up by 11.11%. The tax-in price used to be $4.50, now it is $5.00.

According to the staff the price rise is due to an hike in the rent and inceasing food costs, especially cheese. Will this make a difference in sales? I think that is unlikely. But it will make a change in the tips. If a customer buys two slices and a can of C Plus, the bill now comes to $5.00 even. Will they fish in their pocket for a couple of quarters for a tip? A lot less likely than when they got two quarters back in their change.

So, this may actually result in less cash in hand for the restaurant and its staff. Oh the weird and wonderful world of microeconomics.