N5

QUESTION 2 Palace Cinemas is a cinema chain operating in Brisbane and other cities of Australia. Everyday approximately 10,000 people see a film at a Palace Cinema. These viewings occur mainly in "peak hour,"between 7pm and 8pm. To pay for the film, customers can either purchase a paper ticket at the box office or utilise an electronic online ticket. Online tickets are approximately 15% cheaper than purchasing a paper ticket Which of the following statements are true: Palace Cinema is price discriminating between paper tickets and online tickets. Palace Cinema is using first degree price discrimination between paper tickets and online tickets. The decision to price discriminate will not allow Palace Cinema to capture more consumer surplus. Palace Cinema should not price discriminate as it does not have pricing power