Asked by Flaviano Maurice on Jul 02, 2024
Verified
A local restaurant offers an "all you can eat" ribs special. If a person pays $11.95, she can eat as many servings as she desires at no additional cost. Can you infer anything about her marginal utility from observing her eating behavior?
Marginal Utility
The additional satisfaction or utility gained by consuming an additional unit of a good or service.
- Analyze economic situations to ascertain how consumer actions are influenced by elasticity and utility.
Verified Answer
JC
Joshua Carreon6 days ago
Final Answer :
Since the marginal cost of consuming an additional helping is zero, a customer will stop eating when the marginal utility (or value) derived from eating another serving is zero. Thus, we can infer the marginal utility of eating is zero when the person stops eating.
Learning Objectives
- Analyze economic situations to ascertain how consumer actions are influenced by elasticity and utility.
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