A Movie Theater Can Increase Its Profits Through Price Discrimination

question 620

Multiple Choice

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if

• A)adults buy more popcorn than children.
• B)the cost of showing a movie to children is less than the cost of showing a movie to adults.
• C)it has some degree of monopoly-pricing power.
• D)All of the above are correct.

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Definitions:

Direct Labour Hours

The total hours worked directly on a specific job or task by employees, often used to allocate labor costs to products or services.

Variances

Differences between planned, budgeted, or standard costs and actual costs in business operations.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and manufacturing overhead.

Accounting Period

A specific period of time used for financial reporting, typically a quarter or year, used to calculate financial performance.