Super Size Me

Click here to watch this clip.

What would happen if you ate all your meals at McDonald’s for an entire month without ever working out? Super Size Me, a documentary by Morgan Spurlock, endeavored to find out. At the end of the month Sperlock gained 30 pounds and his cholesterol and blood pressure rose significantly.

Super Size Me highlights the obesity problem in America, pointing out that over 400,000 deaths a year are caused by people being overweight.  Why does Spurlock take aim at McDonald’s, and more generally the fast food industry? The answer lies in the business model that many fast food restaurants follow. These restaurants provide filling food at a low cost, a combination that encourages consumers to overeat.  What McDonald’s lacks in quality, they make up for in quantity.

One of McDonald’s goals is to encourage customers to order more than they need by combining sandwiches, fries and a drink into value meals. Customers scanning for what to order notice that the value meal is steeply discounted compared with the a la carte price of purchasing the items separately. The only way to get the “deal” is to order the bundle.  Consuming a large meal also results in diminishing marginal utility. Often times the last bite of a sandwich or the last gulp of a 32-ounce drink brings very little utility, so it's not uncommon to discard the excess.

This provides quite a contrast with fine dining. At fancy establishments, the portions are smaller by design. A five-course meal is meant to be savored and the experience trumps price. What makes someone willing to pay significantly more when dining out? Upscale restaurants are creating high marginal value by making every bite mouthwatering. They do not want to diminish the marginal value through over-eating.