On Hot Ones, celebrity guests are interviewed while eating progressively spicier wings. In Season 8, Episode 1, Gordon Ramsey discusses the makings of a $25 hamburger as well as the costs that are often “hidden” from the customer. This is a fun, and relevant way, to introduce concepts like labor and rent to students who are unfamiliar with the costs of running a business. Toward the end, Ramsey discusses the notion of excess capacity, whereby firms are not necessarily producing at minimum average total cost. If firms can fill the excess capacity (perhaps through price discrimination), they may become efficient.
A big thank you to my student, Abdullah Al Otaibi, for sending me this clip!