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Suppose there are two types of people going to see two movies: The Dark Knight and Mama Mia, Type A person like Mary is willing
- Suppose there are two types of people going to see two movies: The Dark Knight and Mama Mia, Type A person like Mary is willing to pay $10.00 for Dark Night and $15.00 for Mamma Mia, while Type B person like Jack is willing to pay $18.00 to see The Dark Knight, while $8.00 to see Mamma Mia. Suppose the cost of theatres are zero.
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- If the movie theatres can only sell the tickets individually for each movie, what will be the price they charge for each movie? And what is the total revenue the theatre can collect?
- If the theatres can sell the two movies as a bundle, what is the bundle price the theatre will charge? Will the theatres be better off by selling the two movies as a bundle? Why?
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Authors: Certify Mart
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