A research firm's findings concluded that the demand for movie tickets is price elastic in the afternoon but inelastic in the evenings.Given this information,to increase overall revenue the theatre owners should

A) Reduce the ticket prices for the afternoon shows and reduce the ticket prices for the evening shows
B) Increase the ticket prices for the afternoon shows and reduce the ticket prices for the evening shows
C) Reduce the ticket prices for the afternoon shows and increase the ticket prices for the evening shows
D) Increase the ticket prices for the afternoon shows and increase the ticket prices for the evening shows

Question

​A research firm's findings concluded that the demand for movie tickets is price elastic in the afternoon but inelastic in the evenings.Given this information,to increase overall revenue the theatre owners shouldA) ​Reduce the ticket prices for the afternoon shows and reduce the ticket prices for the evening showsB) Increase the ticket prices for the afternoon shows and reduce the ticket prices for the evening showsC) Reduce the ticket prices for the afternoon shows and increase the ticket prices for the evening showsD) ​Increase the ticket prices for the afternoon shows and increase the ticket prices for the evening shows

Sathita Cheeranont · Accepted Answer

Final Answer : C, Explanation :  Since the demand for movie tickets is price elastic in the afternoon, reducing the ticket prices for afternoon shows will increase the demand, leading to an overall increase in revenue. However, in the evenings, the demand is inelastic, meaning that people are willing to pay higher prices for movie tickets. Therefore, increasing the ticket prices for evening shows will not significantly affect the demand, leading to an increase in revenue. Hence, reducing the ticket prices for the afternoon shows and increasing the ticket prices for the evening shows is the best choice to increase overall revenue.

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