During Its Run on Broadway, the Play the Producers Regularly

question 15

Multiple Choice

During its run on Broadway, the play The Producers regularly sold out all available tickets at the St. James Theater. The theater could have raised ticket prices from $75 to $125 and still sold all available tickets but chose not to do so. The best explanation for this decision is

• A) theater owners are unaware of the elasticity of demand for Broadway shows.
• B) theater owners do not want to raise their tickets on weekends, when demand is high, and then have to lower prices during the week, when demand is lower.
• C) firms sometimes give up profits in the short run to keep their customers happy and increase their profits in the long run.
• D) theater owners are not motivated to maximize their profits.

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Definitions:

Appraisers

Professionals who assess the value of properties, goods, or financial instruments, often for the purpose of taxation, sales, or financing.

Dumping

The practice of selling a product in a foreign market at a price that is lower than the domestic market or below the cost of production.

Price Discrimination

The strategy of selling the same product or service at different prices to different groups of customers, often based on willingness to pay, market demand, or other factors.

Exporting

The process of selling and shipping goods or services from one country to another.