“Why do people go to restaurants if we can make food at home?”

I received this great question from a 5-year-old as we drove into the parking lot of Red Robin.

There are many reasons why restaurants exist alongside our kitchens, pantries and grocery stores.  Those reasons roll up to one economic concept: opportunity cost.

Opportunity cost naturally drives many of our economic choices, most of the time without us even realizing it.

In some cases, we value what we get by choosing a restaurant over fixing the meal at home.   That night the value of the convenience of being able to get a wide menu selection, reasonable quality food and entertainment for the kids outweighed the value of prepping the food at home.