Pricing Power of Baltimore Restaurants

I want to begin this post with two stylized facts about Baltimore restaurants relative to other cities.
1. On average, nice Baltimore restaurants are more expensive than comparable restaurants in other cities.
2. On average, nice Baltimore restaurants are easier to get into (a.k.a. emptier) than comparable restaurants in other cities.

These two observations seem pretty clear to me after just a few months in Baltimore (and having spent lots of time in more than a few major cities for comparison). I'm going to use them as the starting point for this discussion, but I welcome thoughts on either point. If either of these is wrong, my theory (which attempts to explain them) is probably wrong too.

Can we explain these two facts with a single unified explanation? Why doesn't a restaurant cut prices to get fuller? Given the fixed costs of running a restaurant, this would certainly be worth doing if a small price cut would substantially increase the number of customers. The fact that we don't see much of this (judging by the high prices and empty restaurants) implies that in Baltimore you wouldn't get a big increase in customers with a small decrease in price. In other cities, you see lower prices and fuller restaurants because empty restaurants can increase their number of customers more dramatically with small price drops. In other words, Baltimore's restaurant patrons have a more inelastic demand for a given restaurant than patrons in other cities.

Why are Baltimore restaurant patrons more inelastic demanders of dinners than patrons in other cities? The obvious answer here is that larger and richer cities have room in their markets for more nice restaurants of any given type and therefore more competition. The Baltimore restaurant market is less competitive and "thinner" so restaurant owners have more pricing power. Thai Restaurant in Waverly charges much higher prices than similar restaurants elsewhere because you have to Mount Vernon (and arguably to the DC suburbs) to get good Thai food nearby. I'm willing to pay $3 to avoid this commute, and Waverly doesn't have a big enough market to support two Thai restaurants. Therefore, the one Thai restaurant can raise prices a bit knowing our other options are limited.