Kyle Jensen

2/23/05

My Jonathan Gullible Story

 

A Crowded Restaurant

 

A restaurant owner learns about the diminishing marginal product of labor

 

 

            Tom’s stomach started to make noises to indicate that it was time to eat.  It was an hour past noon and Tom still had not eaten anything all day.  He set out to find a place to eat.  Tom passed by lots of fast food restaurants but decided to keep going.  He was in the mood for a nice meal and fast food was not going to cut it.  A sign on the side of the road advertised a new diner up the street.  The sign read, “Best food in Town, and the Best Service!”  He quickened his pace in anticipation of the meal awaiting him.  Tom sat down at a table and was immediately mobbed by four waitresses fighting to ask his order.  Each waitress tried to hand him a menu and then pester him with questions about what he was going to order.  Ordering took about fifteen minutes because Tom had no time to think and because he was so stressed out from all the questions and commotion.  When he finally ordered he fell back in his chair, exhausted. 

            Tom thought to himself that if this was supposedly the best service in town, then why it had taken so long for him to order and why it was such a painful ordeal.  He assumed that he had done something wrong or that he had just gotten unlucky.  Tom tried to amuse himself while he waited for his food, but after about forty five minutes he had had enough.  He walked back to the kitchen area to try to see what was going on with the food and was appalled by the scene.  There were about thirty chefs in the kitchen trying to prepare the food.  The chefs were bumping into each other, food and plates were dropped, and the noise level was deafening.  Tom’s order hadn’t even been looked at because of the backup of other orders.  Tom was furious because the restaurant had falsely advertised.  They said that they had the best service but in reality it was the worst service that Tom had ever seen.  He decided to do something about it and stormed over to a waitress and demanded to see the manager.

            Tom met the manager, Frank, and complained about the horrible service.  Frank look confused and said, “What are you talking about?  We have the best service around.  Look how many waitresses and chefs work here.  We employ more people than any other restaurant in town, and obviously that makes us have the best service.”  Tom could not believe what he was hearing.  “Haven’t you ever heard of the diminishing marginal product of labor?” said Tom.  The manager hadn’t and asked Tom to elaborate.  Tom told him that the diminishing marginal product of labor is the product whereby the marginal product of an input declines as the quantity of the input increases.  The manager was still confused so Tom explained it in simpler terms.  He said, “The theory means that hiring more workers to do a job is more effective only up to a certain point, then adding workers hurts efficiency because there are too many people and the work site becomes crowded and chaotic.”  This applied to the restaurant because there were too many workers and it made the service worse.  The waitresses got in each others way when trying to serve customers, and in the kitchen there were too many chefs for them to be able to prepare the food.  The manager then said, “I thought that if we hired more workers than anyone then we would have the best service, but I guess I was wrong.  Would it be better for me to fire some people so that we can maximize efficiency?”  “Yes, that is exactly what you need to do,” said Tom.  The manager was relieved because he would save money by firing some workers while increasing the efficiency of the service at the same time.  Until Tom told Frank about the law of diminishing marginal product of labor the restaurant was a classic case of too many chefs in the kitchen spoiling the broth.  The manager thanked Tom for his sound business advice and told him that his meal was on the house.