Final answer:
The equilibrium in an all-you-can-eat buffet with a flat rate of $10 is shown by a vertical budget line and a horizontal indifference curve, reflecting a fixed cost and the same level of satisfaction from any amount of consumption.
Step-by-step explanation:
In a buffet setting where the consumers pay a flat fee of $10 and can consume as much as they want, the budget line is perfectly inelastic because the consumer can only spend exactly $10, which is a fixed cost, regardless of how much they consume. On a graph, this would be represented by a vertical line at the quantity associated with the $10 fee. The indifference curve in this scenario would be a horizontal line. This is because the consumer can eat any amount of food for the same price, and thus, any point on the horizontal line will give the consumer the same level of satisfaction—since the price does not change with the quantity consumed.
Consumer surplus in this case is not represented by the typical area between the demand curve and the market price because the price is fixed and consumption is unbounded. However, it could be argued that the consumer surplus is the satisfaction derived from consuming more than the $10 worth, if such a valuation can be made.