Today, all Denny’s restaurant franchises across the United States, Canada and Puerto Rico had a promotion beginning at 6:00 am and ending at 2:00 pm local time in which each customer would receive a grand slam breakfast for free. This promotion was aired during the Super Bowl, so quite a few people participated in it. Normally, the grand slam breakfast averages $5.99.
In analyzing whether this giveaway is actually free, one has to take into account the amount of time each person waited in line. Some people waited in line early, so there’s the opportunity cost from losing sleep while others (those near the middle and end of the line) gave up the chance to go to work, school or do some other activity. I’m not quite sure about the length of the lines, but it was reported that hundreds of people waited in line for this promotion. Assuming all restaurants were at full capacity, then the time spent waiting for Denny’s to clean a table and seat you before you finally get your free meal increases as well. There’s also the expectation of tipping your server.
The question becomes does the free meal that normally costs $5.99 (let’s assume you order drinks and tip as well) out weigh the utility received from the meal (assuming you also tip your server)? For the people who waited in line and got their free meal, clearly the utility from the free grand slam breakfast outweighed the opportunity cost of losing sleep, missing work, missing school or doing something else (benefits greater than costs). For those who avoided the free promotion, clearly the utility from the free grand slam breakfast was not greater than the opportunity cost from the aforementioned activities (costs greater than benefits).