Answered: You manage a movie theater that can…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You manage a movie theater that can handle up to 8,000 patrons per week.

The current demand, price, and elasticity for ticket sales, popcorn, soda, and candy are given in below. The theater keeps 45 percent of ticket revenues. Unit cost per ticket, popcorn sales, candy sales, and soda sales are also given. Assuming linear demand curves, how can the theater maximize profits? Demand for foods is the fraction of patrons who purchase the given food.

	Elasticity	Current Price	Demand	Cost
Ticket	3	8	3000	0
Popcorn	1.3	3.5	0.5	0.4
Soda	1.5	3	0.6	0.6
Candy	2.5	2.5	0.2	1

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