Assume That the Price Elasticity of Demand for Movie Theatres

question 27

Multiple Choice

Assume that the price elasticity of demand for movie theatres is -.85 during all evening shows but for all afternoon shows the price elasticity of demand is -2.28.For the theatre to maximize total revenue,it should

• A)Charge the same price for both shows,holding other things constant.
• B)Charge a higher price for the afternoon shows and lower price for the evening shows,holding other things constant
• C)Charge a lower price for the afternoon shows and higher price for the evening shows,holding other things constant
• D)Need more information

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