Wednesday, October 31, 2012

MANY MOVIE THEATRES CHARGE A LOWER PRICE FOR THE FIRST SHOW ON WEEKDAY AFTERNOONS THAN THEY DO FOR A WEEKNIGHT OR WEEKEND SHOW.EXPALIN WHY?IS...

No, it's not diminishing marginal utility.  Really what it is is that these are in a sense different products with different demand curves.


Fewer people are willing/able to go to movies early on weekday afternoons than at the other times you mention.  Therefore, there's going to be less demand at any given price.  So the theaters lower the prices so as to be able to move along the demand curve and get more people to come.


It makes sense for them to sell these tickets cheaply as long as they can make more money than their variable costs (paying a ticket taker, etc).  Because as long as they can make something (even if not as much as they can later) they're better off than if they just let the theater sit empty.

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