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    Making Short Run & Long Run Decisions for a Small Playhouse

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    Suppose that you became president of a small theater company. Your playhouse has a 120 seats and a small stage. The actors have national reputations, and demand for tickets is enormous relative to the number of seats available; every preformance is sold out months in advance. You are elected because you have demonstrated an ability to raise funds successfully. Describe some of the decisions that you must make in the short run. What might you consider to be your "fixed factor"? What alternative decisions might you be able to make in the long run? Explain.

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    Solution Preview

    In the short run, I must make decisions such as how much to charge for tickets, how many performances to schedule per week, how many ticket-sellers and ushers to ...

    Solution Summary

    My playhouse is small but the demand for tickets is large. What decisions do I have to make in the short run and the long run?