Louey's Greasy Spoon restaurant charges $15 for each dinner entree and $5 for each dessert selection, and they offer a dinner special that provide an entree and dessert for $18. If a diner at Louey's assigns zero value to dessert and $19 to an entree, what is their optimal decision?

Question

Quizplus · Accepted Answer

If the diner assigns zero value to dessert and $19 to an entree, then buying just the entree for $15 will give them a higher value than buying the dinner special. Buying just the dessert for $5 would not give the diner any value. Therefore, the optimal decision is to buy only the entree.

Louey's Greasy Spoon Restaurant Charges $15 for Each Dinner Entree