Why is Prague more expensive than the rest of the Czech Republic?

Prague is more expensive because the set of buyers and potential buyers (or consumers) is wealthier which is why the equilibrium market price for many things (like restaurants) is higher. The potential buyers are wealthier because the wages in Prague are higher, often by a factor of two in average, than they are outside Prague; and because the buyers are supplemented with foreign tourists or officials or business people who mostly do their work in Prague.

Subscribe to Prague, Praha, Costs of living