Economics of All You Can Eat Buffets

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The notion of paying one set cost for 'unlimited' quantities of a good or service is certainly appealing, and that appeal is exactly what all-you-can-eat (AYCE) restaurants take advantage of. Gobi Brighton, an all-you-can-eat barbeque restaurant in England, offers unlimited servings of Asian and Middle-eastern foods for one fixed price of 12 pounds. Of course, no customer will actually eat an infinite quantity. Taking this factor into account, and given the various costs the restaurant must pay to deliver the service, this fixed price that consumers pay is determined such that the restaurant will profit in the long-run despite the quantity customers individually eat. Andy and George, however, two middle-aged men who frequently visit this AYCE restaurant, were recently kicked out and banned from Gobi Brighton because, according to the manager of the restaurant, they were “[eating] the restaurant out of business” (Dartford 2012). While it is certainly possible that business may not be so great for Gobi Brighton these days, whether two customers can be blamed for it or not is another question. This paper will analyze the economic principles of AYCE restaurants and determine if it was possible for Andy and George to have been actually eating Gobi Brighton “out of business” with their appetite for Asian and Middle-eastern food.

Buffets, or AYCE restaurants, can be very profitable because costs paid by the restaurant are much lower compared to those of an a la carte restaurant. Customers are given plates and head to the food counters to get whatever they like instead of ordering from a menu. Consequently, these restaurants have little need for waiters, and thus have less demand for them compared to other restaurants. Furthermore, because food is prepared in large quantities at a time as opposed to being prepared non-stop and on-demand, there is also a lower demand for cooks. On the other hand, buffets require continuous upkeep to ensure food safety and presentable...
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