How well are the Restaurants are using Economic Concepts

1. Markets:

• Restaurants are more in the market we can say that the sellers in the market are very high and the buyers in the market are also very high so, this restaurants will come under Monopolistic Market.
• To enter this market there are no barriers in the market any one can enter in this market.
• In this the products are differentiated from seller to seller.
• In this market demand curve will be downward sloping, the percentage of change in price will cause a change in the demand, which is relatively elastic.

2. Law Of Diminishing Marginal Utility:

• It says that the amount of satisfaction that will derive from additional unit of consumption will be decreasing.
• Restaurants made use of this concept to come with a new way of offering Unlimited Food in the restaurants which was a big hit the restaurants.
• Many of the people were going to Unlimited buffet to get maximum satisfaction. As the people cant eat much because of the diminishing marginal utility it will be a benefit to the restaurants.

3. Law Of Diminishing Returns:

• Law Of Diminishing Returns says that over increasing of labour shows less output in the ending.
• This concept is helpful to the restaurants to maintain a limited number of workers in the restaurants so that the output derived from the labours will always be positive.
• If there is are more number of workers in the restaurants the output will be negative in the end and it will cause a loss to the restaurants. 

4. People Respond To Incentives:

• People Respond to incentives is the concept used by the restaurants to attract the customers and to make their more profitable.
• As people respond to incentives restaurants offer the customers many advantages for attracting the people this makes the people to respond to the offers.
• By this concept the restaurants are gaining more profit and also clearing the old stock that they have in the restaurants.
• Ex: 1+1 offer, 25% Discount, Cash Backs, Vouchers.

5. Production Possibility Curve:

• PPC is a hypothetical representation of the amount of two different goods that can be obtained by shifting resources from the production of one to the production of the another.
• In the same way when the restaurants feel that the demand of the Lunch is lower than the Dinner then by using this concept the restaurants can make a change.
• By shifting the resources from the lunch to the dinner this can be solved by using the Production Possibility Curve.
• This shows the demand of the society.
• In this way the restaurants are using this concept to make the best utilization of the resource.