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This post addresses the Mid-Atlantic Cinema economics case.

Mid-Atlantic Cinema, Inc. runs a chain of movie theaters in the east-central states and has enjoyed great success with a Tuesday Night at the Movies promotion. By offering half off its regular $9 admission price, average nightly attendance has risen from 500 to 1,500 persons. Popcorn and other concessions revenues tied to attendance have also risen dramatically. Historically, Mid-Atlantic has found that 50 percent of all moviegoers buy a $5 cup of buttered popcorn. Eighty percent of these popcorn buyers, plus 40 percent of moviegoers that do not buy popcorn, each spends an average of $4 on soda and other concessions.

A. Write an expression describing total revenue from tickets plus popcorn plus other concessions.

B. Forecast total revenues for both regular and special Tuesday night pricing.
C Forecast the total profit contribution earned for the regular and special Tuesday night pricing strategies if the profit contribution is 30 percent on movie ticket revenues and 80 percent on popcorn and other concession revenues.

Solution Preview

Mid-Atlantic Cinema, Inc. runs a chain of movie theaters in the east-central states and has enjoyed great success with a Tuesday Night at the Movies promotion. By offering half off its regular $9 admission price, average nightly attendance has risen from 500 to 1,500 persons. Popcorn and other concessions revenues tied to attendance have also risen dramatically. Historically, Mid-Atlantic has found that 50 percent of all moviegoers buy a $5 cup of buttered popcorn. Eighty percent of ...

Solution Summary

The solution provides all necessary calculations and explanations for the Mid-Atlantic Cinema case, including the expression needed to describe total revenue from tickets plus popcorn and other concessions, and the forecast of total revenues for regular and special Tuesday night pricing. The total profit contribution earned for the regular and special Tuesday night pricing strategies if the profit contribution is 30 percent on movie ticket revenues and 80 percent on popcorn and other concession revenues is also answered. All calculations for all parts are provided.

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