Movies theatre popcorn pricing employs some very sophisticated strategies that are worth looking at.
Diminishing marginal utility, and pricing to account for it, becomes very simple when you think about the enjoyment you get from something like fresh brownies.
With increased consumption of a product there is a decline in the marginal utility that comes from the consumption of each additional unit.
More examples of products with diminishing marginal utility, and the ways smart vendors price to increase consumption in spite of that.
Another example that illustrates how the intersection of perishability and diminishing marginal utility determines discounting.
The menu from this BBQ restaurant shows they understand the diminishing marginal utility of their product and price to get customers to buy more anyway.
Draft beer is highly perishable and offers diminishing marginal utility – a combination that makes discounting larger servings a profitable approach.
The historic ships in Baltimore, open to tourists, recognize that they offer diminishing marginal utility and price accordingly.
Recent examples of smart vendors understanding (and accepting) the nature of their products and discounting to offset their diminishing marginal utility.
The very effective pricing on Delta/Gogo in-flight internet access made me spend almost three times what I intended and feel great about it.