Assume that the price elasticity of demand for movie theatres is -.85 during all evening shows but for all afternoon shows the price elasticity of demand is -2.28.For the theatre to maximize total revenue,it should

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For price elasticity of demand, we know that if the value is less than -1, it is considered to be "elastic" demand. If the value is between -1 and 0, it is considered to be "inelastic" demand.

With that in mind: 
- Since the price elasticity of demand for evening shows is -.85, it is considered to be inelastic demand
- Since the price elasticity of demand for afternoon shows is -2.28, it is considered to be elastic demand

To maximize total revenue, the theatre should charge a higher price for the inelastic evening shows and a lower price for the elastic afternoon shows. This means that choice C (Charge a lower price for the afternoon shows and higher price for the evening shows, holding other things constant) is the best option.

Assume That the Price Elasticity of Demand for Movie Theatres