In my younger days, I used to scoff at All You Can Eat deals: “They’ve never seen me eat.” I still wonder how they manage to survive:
I had wondered the same, but thought that the answer was pretty straightforward: restaurants have high fixed costs and lower marginal costs. Drinks at restaurants are usually bottomless, because once they have the fountain, it’s cheap to refill. This is less the case with food, but there’s still something to it. It’s one of the reasons that portion sizes tend to be so large and why “full” servings are such better values than “Half servings” much of the time. I suspect this is particularly the case at buffets, which often do not use the most expensive ingredients. So the goal is to simply get butts in seats and get them to shell out a certain amount of money.
And no, I can’t eat that much anymore. Just as well.
(See also “The Economics of All-You-Can-Eat Buffets.”)