The manager of a movie theater is developing his policies for the structure of his movie admission prices. He knows that there are two segments of his market. Segment A consists of frequent movie goers. Segment B consists of those who go to the movies only occasionally.

(a) Describe the concept of the best price that is presented in the course material. How can you tell if a price for a particular market segment is that segment's best price?

(b) Which of the movie theater's two market segments is likely to have the lowest best price? Use the three factors that determine the best price to justify your answer.

(c) If the movie theater's two market segments indeed have different best prices, why would it be in the manager's interest to charge each of the two market segments a different price rather than have a single admission price for all customers?

(d) Name and describe a price segmentation fence that could be used to effectively charge one price to Segment A and a different price to Segment B. Explain how this fence can be effective in accomplishing price segmentation in this situation.