One way to promote a new business is to offer free items. If you were to open a new restaurant and offer free food, you likely would have a line out the door. How would an economist understand the behavior of those standing in line?

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Cassandra

Social Studies

2 May, 17:30

One way to promote a new business is to offer free items. If you were to open a new restaurant and offer free food, you likely would have a line out the door. How would an economist understand the behavior of those standing in line?

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Jovani Crane · Answer 1

People often offer free food to the other people to attract customers when they open new restaurants. In doing this people put some extra effort and do promotion so that people are aware of the new restaurant and they come to eat at the restaurant.

When people are offered free food people are automatically attracted towards the restaurant and they line up n front of the restaurant waiting for their time to go inside and eat food.

An economist can understand from the behaviour of those people those who are standing in line outside the restaurant is that those people waiting outside in line place a low value on the use of their time. Thus this implies that the benefit in waiting in line is greater than the cost or wastage of time.