Two different demand curves at your movie theaters

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As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 20 – 0.001Q; on weekdays, it is P = 15 – 0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 “royalty” for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case? Third degree price discrimination Block pricing First degree price discrimination Second degree price discrimination What price should you charge on weekends? Instruction: Round your answer to two decimal places. $ What price should you charge on weekdays? Instruction: Round your answer to two decimal places. $

Reference no: EM131244336

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