Which economic principle accounts for the fact that all-you-can-eat buffet restaurants can be profitable?
A) The law of demand
B) The principle of diminishing marginal utility
C) The principle of diminishing marginal product
D) The law of supply

Question

Quizplus · Accepted Answer

The principle of diminishing marginal utility states that as a person consumes more of a good or service, the additional satisfaction obtained from each additional unit consumed decreases. In the case of all-you-can-eat buffet restaurants, customers may pay a set price for unlimited food, but they will reach a point where their satisfaction from each additional plate or serving decreases. However, the overall cost to the restaurant to provide additional plates of food may be relatively low, allowing them to continue offering the buffet at a profitable price point.

Which Economic Principle Accounts for the Fact That All-You-Can-Eat Buffet