Using Marginal Analysis, Explain Why Many Restaurants and Coffee Shops

question 114

Essay

Using marginal analysis, explain why many restaurants and coffee shops offer low-cost refills on beverages (for example, a shop may charge $1.50 for a cup of coffee and only $.50 for a refill).

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Definitions:

Online Classes

Courses or educational programs delivered over the internet, allowing students to learn remotely.

Consumer Surplus

The discrepancy between what consumers are prepared and capable of paying for a product or service compared to what they end up spending.

Willingness to Pay

The maximum amount a buyer is prepared to spend on a good or service, reflecting the value they derive from it.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.