Reference no: EM133065644

Why is milk in the back of the store?

Listen to this EconTalk podcast (https://www.econtalk.org/archives/2013/09/munger_on_milk.html) for an interesting discussion about why things are the way they are in the grocery store.

Have you ever wondered why milk is in the back of the store? Is it so that the store makes you travel past all of the high-profit items to drain more money from your wallet? Or could the reason be due to fixed (or variable) costs? Another discussion taken up in the podcast is why take-out items at restaurants are cheaper than dine-in. A related question would be why are similar items on the lunch menu cheaper than on the dinner menu?

I like this podcast for three reasons: 1) it gives you a lot of examples of how economists look at things, 2) it demonstrates how the issue of internal firm costs (and production) affects the visible behavior of firms, and 3) it provides counter-arguments against the "companies are just out to rip you off" line of thinking.

How persuasive do you find these arguments? If any of you have experience working at grocery stores or restaurants, I'm sure your insights will be particularly useful.