Theatres charge lower prices for a matinee and usually don't accept coupons for the night showing of movies because
A) consumers that attend the matinee have a higher price elasticity of demand.
B) consumers that attend the night show have a lower price elasticity of demand.
C) it increases profits compared to charging a single price.
D) All of the above.

Question

Quizplus · Accepted Answer

Theatres charge different prices for matinee and night showings and restrict coupon use for night showings because consumers' price elasticity of demand varies by time of day. Matinee attendees are more price-sensitive (higher price elasticity), while night show attendees are less so (lower price elasticity). By segmenting the market in this way and charging different prices, theatres can increase their profits compared to if they charged a single price for all showings.

Theatres Charge Lower Prices for a Matinee and Usually Don't