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.

---

Definitions:

Personally Liable

A legal term referring to an individual's responsibility to settle a debt or legal judgment from their personal assets.

Corporate Bonds

Debt securities issued by corporations to finance their operations, which typically pay periodic interest payments and return the principal at maturity.

Common Stock

A security that evidences ownership in a corporation. A share of common stock gives the owner a proportionate interest in the corporation with regard to control, earnings, and net assets. Common stock is lowest in priority with respect to payment of dividends and distribution of the corporation’s assets on dissolution.

Proportionate Interest

The share or percentage ownership that an individual or entity holds in a particular asset, reflecting their portion of the total value or earnings.