Operation Of Newspaper And Soda Vending Machines?
Newspaper machines and soda vending machines operate very differently. The latter
is a mechanical box. You place your four quarters in the machine and you open the door and low and behold there is a stack of newspapers at your disposal. Most people take one and close the door for the next patron to purchase his own copy. But notice that soda vending machines don’t operate the same way. They are also mechanical but when the four quarters are inserted and a selection is made only one can of soda is available for the consumer to purchase. Explain in terms of marginal utility why these two machines are designed so differently?
January 27th, 2010 at 11:49 am
Marginal utility describes the added enjoyment you get from using another unit of the product. Using or taking an additional newspaper has zero, by some measures negative (The customer has to carry around extra papers), utility. A customer already has the information in his first paper. They gain nothing by taking a second.
A soda drinker does have positive marginal utility with each successive unit. Maybe one soda didn’t satisfy their thirst. They might be tempted to take a second without paying.
Good question.