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Movie Theater Price Discrimination Case Study

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Economics Questions
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Q1. How Movie Theatre practice price Discrimination
Like others in the service industry, movie theatre has different prices for its customers, one for students, senior citizens and adult. The different set of movie prices for a particular movie is done in view of profit maximization. Large elasticity in demand prompts the varied prices of elderly people and the students. Adults are charged at relatively higher costs because they have low smaller elastic demand. This is the principle of price discrimination exhibited by movies. The difference in pricing between the distinguished group is borne out of market segmentation. Adults are likely to pay higher prices compared to the other three categories hence higher prices (Pepall et al., 2008).
Q2. Explain how airline companies …show more content…

The main aim of adverts is to change customer perception making the demand curve more inelastic. For example, Hongkong’s textile and clothing industry have been on a spirited campaign to popularize their brands inhibit entry of other business from other nations. They further deliver high-quality products to tighten the supply chain barring any new entry into the market.
Q3. How Might advertising make Markets less competitive-Hong Kong
Advertisement further has the potential to increase the competitive edge of the market by reliably informing the customers and giving them an opportunity to make an informed decision. It further allows multiple entries of new firms into the market to add more competitive. The expensive advertisement is further creating the perception of higher quality. Through spirited advertisements, Hongkong is the world most competitive economy due to multiple entries of new businesses into the market.
Q5. Can Oligopoly earn profit and

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