AMC Theatres Will Soon Charge According to Where You Choose to Sit

AMC Theatres is setting ticket prices according to where patrons sit in the auditorium. Front row seats are Value Sightline seats and cost less, and seats in the middle are Preferred Sightline seats and cost more. The remaining Standard Sightline seats are available for a standard admission ticket.—npr.org

Answer the following questions to check your understanding of the story.

1) Why is AMC Theatres able to price discriminate?

AMC Theatres can price discriminate because ________________.

a) AMC Theatres is a monopoly and all monopolies price discriminate

b) movie goers differ in the value they place on their location in the movie theatre

c) the cost of providing seats varies according to their location in the movie theatre

d) movie goers go to a movie theatre for the experience and don’t care where they sit

2) Why does AMC Theatres price discriminate?

AMC Theatres price discriminates ________________.

a) to eliminate consumer surplus

b) to convert some consumer surplus into economic profit

c) to increase consumer surplus by allocating movie seats by willingness-to-pay

d) to lower its costs and increase economic profit

AMC Theatres Will Soon Charge According to Where You Choose to Sit

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