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I think they're referring to estimating what restaurant food "should" cost, based on what it is. Rule of thumb I heard years ago was aiming to sell for about 3x what your ingredients cost you plus tax, but that may have increased since.



You should raise prices until you are not quite sold out. If you are at max capacity, you are by definition not charging enough.


There's a lot more to it than that.

Such an approach can give you a long-term unsustainable clientele.

Such an approach can lose you the marketing cachet of being sold out for months.

etc.


Almost no restaurant is ever sold out.


At peak times. There's a reason lots of restaurants have happy hours and lunch specials. And a weekday night tends to be less in demand than a Friday or Saturday.




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