Pizza sells for $6.50 at my local store, but I'm sure pizza stores would still exist if they were priced at $10 instead, except there will be less stores.
As you go up in quality, it gets harder and harder to scale because..., how many celebrity chefs can you find in a city? You might find a dozen, but it would probably be very expensive to get enough chefs to staff shops in every suburb.
Prices are a function of demand AND supply. It simply isn't possible to supply enough celebrity chefs at $30 a meal. If there was such a shop it will have a long line stretching out around three blocks every night.
You won't get 10 times better meal by paying 10 times more; It just means the price equilibrium is 10 times higher. There's nothing to it, I don't think it is intentionally "used by merchants to extract money from consumers". They price their products at a point to maximise profit, and that's all there is to it.
As you go up in quality, it gets harder and harder to scale because..., how many celebrity chefs can you find in a city? You might find a dozen, but it would probably be very expensive to get enough chefs to staff shops in every suburb.
Prices are a function of demand AND supply. It simply isn't possible to supply enough celebrity chefs at $30 a meal. If there was such a shop it will have a long line stretching out around three blocks every night.
You won't get 10 times better meal by paying 10 times more; It just means the price equilibrium is 10 times higher. There's nothing to it, I don't think it is intentionally "used by merchants to extract money from consumers". They price their products at a point to maximise profit, and that's all there is to it.