More Examples of Pricing For Diminishing Marginal Utility
Several recent posts look at how vendors price to increase consumption of products that offer diminishing marginal utility. And example is ice cream – a little is great, but too much will make you feel sick. The "utility" ice cream provides (eating pleasure) decreases with each unit consumed.
So how does the vendor increase consumption in spite of that? One approach is to discount larger serving sizes. One example looks at draft beer, another looks at barbecued meat.