Costco is losing money on its $1.50 hot dog combo, which include hot dogs, buns, condiments, soda, and bottomless refills. According to the Bureau of Labor Statitcics CPI inflation calulator, Costco hot dogs should be more based on inflation. See video for more.
Discussion Questions:
- What sort of strategies does Costco use to keep the hot dog combo at $1.50?
- Reflect on the factors of production and Costco’s role as being inexpensive. How did Costco achieve this position? What does it mean for other stores like Costco? Explain.