JC
Answered
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?
On Sep 23, 2024
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.