Why Is Popcorn So Expensive at the Movies? Make a Case

question 29

Essay

Why is popcorn so expensive at the movies? Make a case for each of the following - that the high price of popcorn is price discrimination and that it is not price discrimination.Identify all the factors that are or are not present,enabling price discrimination by the theatre owner.

---

Definitions:

AVC

Average Variable Cost represents the variable costs (like materials and labor) associated with producing each unit of output.

ATC

Average Total Cost, the total cost of production divided by the quantity of output produced, encompassing both fixed and variable costs.

MC

Short for Marginal Cost, it refers to the change in total cost that arises when the quantity produced is incremented by one unit.

MR

Marginal Revenue, the additional income that is gained from selling one more unit of a good or service.