A brutal story of capitalism at work: $0.75 pizza in Manhattan
N. R. Kleinfield in The New York Times:
On Thursday evening a week ago, Bombay/6 Ave.—unprovoked, and without warning—cut its pizza price to 79 cents. The next morning, 2 Bros. retaliated by moving to 75 cents (its owners felt it was easier to make change from a dollar than at 79 cents). Bombay/6 Ave. matched the 75 cents, and that’s where everything sits.
Clearly, a slice of pizza cannot be sold profitably in Manhattan for $0.75. The price is an unsustainable gesture. Something has to give. It’s going to be fascinating to watch the story unfold.
See also: The term used in biology to describe this evolutionary principle (as it manifests itself in ecosystems) is punctuated equilibrium and the term describing the effect in economics is called the Bertrand Paradox.