Why do bars charge customers for bottled water but give peanuts for free?

Question

I need to write a paper on this and I know the answer sounds obvious, but how can I tie that into microeconomics? Any ideas?

Answer 1

I think because peanuts make you thirsty. And when you are thirsty and in a bar you are more likely to order alcoholic drinks. Alcoholic drinks also make you thirsty too. So it is a way to make the customer buy more booze. Bottled water is enough to satisfy your thirst and they don't want you to be at a bar drinking water for free. That is why they charge for it. The bar gives you free peanuts so you can strike up a conversation with someone and after a while you will get thirsty. That is why it is free, in my opinion.

Answer 2

I think the idea is that they have to pay for the bottled water and want to make money off it, or at least break even. The peanuts are to help sober up their customers so that they don't drive drunk and the bar could be held liable. Interestingly enough, they do give out free tap water. AND if you are the sober driver, they will give you free bottled water and / or soda usually. Once again, I think this has to do with safety and keeping their non-drinking customers happy so that they will come back again.

Answer 3

Because when you eat free peanuts you may get thirsty and will have to buy their water at a price already including the price for peanut, since most probably you will not come out and bring your own drink. In this sense the bar is in some way a "monopolist" in providing water.
Hope it will help.

Answer 4

Most bars will give you free water.

The peanut thing is simple to tie in with you paper.

It is simply because if you eat the peanuts the salt makes you thirsty so you buy more beer.

Beer is considerably more expensive than peanuts, so the bar uses the peanuts as a kind of "Loss Leader". They take the hit on the cost of the peanuts because they know they will make more than their cost in the profit they make on the extra sales of beer.

Answer 5

First of all, any decent bar will give you a pint glass of water for free. As for microecon. angle, just focus on what the bar is selling to make money, beer. Simple supply and demand, the water and peanuts are cost very little, but peanuts increase demand for beer, and water decreases it. If the demand for beer is up, the bar can charge more for it.