Consider the movie ticket and popcorn example discussed in Section 17.7. The theater sells two products, tickets and popcorn. Suppose the weekly demand for movie tickets is Quiz = 400-20Ptiz - 10Ppopcorn, where Ptix and Ppopcorn are the prices of a ticket and a bag of popcorn, respectively. Suppose that each time a moviegoer buys a ticket, his demand for popcorn is Qpopcorn = 3-0.4Ppopcorn where Q popcorn is the number of bags of popcorn the moviegoer buys. Suppose further that the theater's marginal cost of a ticket is $2, while the marginal cost of popcorn is $1.5. Instructions: Round your answer to 2 decimal places. a. What is the profit-maximizing price of a movie ticket if a bag of popcorn sells for $5 a bag? $ 9.75 * b. In Section 17.7, the marginal cost of popcorn was $0.50 and the price of a ticket was $8. Explain intuitively why the profit-maximizing price in this problem is different from the profit-maximizing price in Section 17.7. O When the marginal cost of popcorn increases, the profit-maximizing price of movie tickets goes down, because popcorn and movie tickets are complementary products. O When the marginal cost of popcorn increases, the profit-maximizing price of movie tickets goes up, because popcorn and movie tickets are substitute products. O When the marginal cost of popcorn increases, the profit-maximizing price of movie tickets goes down, because popcorn and movie tickets are substitute products. When the marginal cost of popcorn increases, the profit-maximizing price of movie tickets goes up, because popcorn and movie tickets are complementary products. ✔ O When the marginal cost of popcorn increases, the profit-maximizing price of movie tickets does not change, because movie tickets and popcorn are unrelated products.

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