Question
As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than
As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 15 0.001Q; on weekdays, it is P = 8 0.001Q. You acquire legal rights from movie producers to show their films at a cost of $20,000 per movie, plus a $2.50 "royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case?
multiple choice 2
- Block pricing
- First degree price discrimination
- Second degree price discrimination
- Third degree price discrimination
What price should you charge on weekends? Instructions: Enter your response rounded to two decimal places.
$
What price should you charge on weekdays? Instructions: Enter your response rounded to two decimal places.
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