Pricing with Market Power in a Cinema
Not what you're looking for?
You own a theater with 200 seats. The demand for seats is Q = 300 - 100P. You are charging $1.25 per ticket and selling tickets to 175 people. Your costs are fixed and do not depend on the number of people attending. Should you:
a) Cut your price to fill the theater.
b) Keep your price the same.
c) Raise your price.
d) Not enough information.
Explain your answer.
Purchase this Solution
Solution Summary
This is a computation for a 200 seat theater given the quantity demanded equation. The optimum decision is to raise the ticket price to attain a higher gross revenue.
Solution Preview
On cutting the price of ticket, let us say, to $1.00, will result to the theater with fully filled-up seats. This is computed as:
Q = 300 - 100P
Q = 300 - (100 *1.00)
Q = 300 - 100
Q = 200 seats.
Gross revenue would be $200. This is computed as $1.00 * 200 ...
Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking