The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits. Concept Introduction: Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

37

"Question 3 (Consumer Choice )" Answer the following questions: a. Suppose shawarma cost $2 and briyani rice cost $3. If the marginal utility of shawarma at the optimal mix of consumption is 10 utils, what is the marginal utility of a briyani rice? b. Under what conditions can sellers engage in price discrimination? Give an example of price discrimination. "Answer"

Question 18 An increase in the price of product A will: cause utility-maximizing consumers to buy more of A. decrease the marginal utility per dollar spent on A. not affect the marginal utility per dollar spent on A. increase the marginal utility per dollar spent on A.

Answer 2

Question

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.

Answer 6

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.

Answer 7

Chapter 6, Problem 1P

To determine

The relationship between the diminishing marginal utility and the offer of the restaurants of “all you can eat” and the restrictions imposed by the restaurants in order to earn profits.

Concept Introduction:

Law of Diminishing Marginal Utility: The law states that as we consume more and more of a unit, the successive utility from consuming additional units goes on falling. In other words, the marginal utility goes on falling as we consume more of a good.

Answer 8

Expert Solution & Answer

Explanation of Solution

The restaurant owners know this concept and know that a consumer will consume till that unit of good where his marginal utility is positive. They know that as consumer consumes more, the marginal utility starts falling. So, the customers would not want to go to dissatisfaction and this would make them stop soon.

Some restrictions that restaurant can impose on customers to make a profit are as follows:

(a) The customer cannot share his plates with other customers.

(b) Time of consumption must be limited.

(c) No takeaways are allowed in the bags.