Restaurant prices look arbitrary from the outside, but most are built from a single ratio and then adjusted. The ratio is the share of the selling price that the ingredients are allowed to consume.
The starting point is a target food cost
Kitchens work out the cost of every component in a dish, down to the oil it is cooked in, and express that total as a proportion of the intended price.
Operators set a target for that proportion, and multiply the ingredient cost accordingly to reach a starting price for the item.
The target differs by format, because a place with heavy service costs and long dwell times needs a smaller share going to ingredients than a fast counter does.
Waste and yield are part of the ingredient cost
The usable portion of a raw ingredient is smaller than what was purchased, once trimming, bones, peel and spoilage are accounted for.
Costings therefore work from yield rather than purchase weight, and an ingredient with poor yield is far more expensive on the plate than its invoice price suggests.
Portioning discipline matters for the same reason, since a dish served generously by one cook and sparingly by another has two different costs and one price.
Not every dish carries the same margin
Menus are engineered as a whole. Items that sell in volume with low ingredient cost subsidise the ones customers expect to see but which return little.
Drinks generally carry a far better ratio than food, which is why beverage sales dominate the profitability of many rooms regardless of what the kitchen produces.
Design follows this. Placement, spacing and how prices are written all steer attention towards the items the operator most wants sold.
Fixed costs sit behind every plate
Rent, wages, energy, insurance and equipment continue whether or not anyone is seated, and they are recovered across whatever number of covers the room actually serves.
That makes seat turnover as important as margin, since the same dish contributes very differently in a room that fills twice an evening and one that fills once.
It also explains why quiet periods are attacked with set menus and early sittings. Filling a seat below the usual margin still beats leaving it empty.
Prices adjust slowly and unevenly
Ingredient costs move constantly, but reprinting menus and resetting customer expectations are both costly, so kitchens absorb small movements rather than repricing continuously.
Specials exist partly as a release valve, allowing volatile or seasonal ingredients to be sold at a price set for the week rather than the season.
When a permanent increase does arrive it therefore tends to be larger than the underlying change, because it has been deferred for some time.