Most movie theatres charge different prices to different groups of customers for movie admission but not for movie popcorn. Which of the following is a reason for this?
A) because the markup on movie popcorn is very high and movie theatres do not want to forego this source of revenue
B) because the demand for popcorn is very high relative to the demand for movie admissions
C) because it is easier to limit resale in movie admissions but not in popcorn
D) because the cost of operating a concession stand in a movie theatre is very high compared to the cost of showing a movie

Question

Quizplus · Accepted Answer

Movie theatres can easily limit resale of movie tickets by controlling the physical distribution of tickets, whereas it is difficult to limit resale of popcorn. Therefore, they do not need to charge different prices for popcorn based on customer groups. Additionally, A, B, and D could be true to some extent but do not fully explain the reason for the pricing strategy.

Most Movie Theatres Charge Different Prices to Different Groups of Customers