Movie theaters often charge different people different prices for admission. Why don't theaters charge different prices for popcorn and other food items?
A) It is difficult to limit the resale of food items from those who pay low prices to those who would have to pay high prices from the concession stand.
B) Once people are in the theater, concession stands have monopoly power and can charge everyone the same high prices for food.
C) Although the elasticity of demand for admission differs among customers, most people have the same the elasticity of demand for food items.
D) Concession stand personnel are too busy to ensure that different people pay different prices for food items.
A
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a. externalities and market power. b. market power and incorrect forecasts of consumer demand. c. externalities and foreign competition. d. incorrect forecasts of consumer demand and foreign competition.
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