The line outside tiny Georgetown Cupcake sometimes stretches 100 people or more, all queuing up for one of the shop's distinctive $2.75 treats. Regulars have been known to pay people to hold their place. Others multitask or use their cellphones to check whether their favorites are still available. Passersby wonder what all the commotion is about.
Here is more. Why don't they raise the price?
My first guess is that if they raise the price, and the bubble bursts due to market saturation and substitutes (and the cost of expansion) they will be stuck with an overvalued product.
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