Question

Why do people routinely stuff themselves at all-you-can-eat buffets? Explain in terms of both utility and demand theories.

Answer 1

According to theory of Consumer behavior , Utility is the satisfaction that arises from the consumption of a goods and services and total utility is the satisfaction which arise from the consumption of one product (all you can eat buffet). Marginal utility is the satisfaction which arises from a consumption of another single product.
So when you go to a buffet, you only have to pay only once to go there . In this way, when you eat food in this buffet system, it seems like free, so you make additional trips to eat. Therefore, people who enjoy this buffet fashion eat food until their marginal utility falls upto zero and they reach the state of total utility. Also under the law of demand, as the price decreases, its consumption by the person increases. Therefore as Total Utility (all you can eat buffet) increases , marginal utility decreases and people routinely stuff themselves in all you can eat buffet .