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5(c) The Wall Street Journal reports that AMC Entertainment is offering moviegoers who view Cinderella Man, a full refund if they do not like it.
5(c) The Wall Street Journal reports that AMC Entertainment is offering moviegoers who view Cinderella Man, a full refund if they do not like it. Comment on the economic rationale for it. Will this strategy increase the number of viewers? What types of consumers would ask for a refund? Will this deal increase overall revenue for the distributor? 5(d) Suppose that the owner of amusement park can practice rst-degree price (or perfect price) discrimination by charging a different price for each ride. Assume that all rides have zero marginal cost and all consumers have the same tastes. Will the monopolist do better by charging for rides and setting a zero price for admission or do better charging an admission fee and setting a zero price for rides? Explain your reasoning
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