AMC Theaters Scraps Plans to Charge More for Good Seats

AMC’s tiered seat pricing test showed most moviegoers who previously sat in the preferred Sightline section continued to choose those seats, even with an upcharge.—cnn.com

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

1) What can we infer about the marginal benefit of a movie ticket for a moviegoer who sits in the Sightline section before and after the upcharge?

Before the price rise, marginal benefit ____________ price, and after the price rise, marginal benefit ____________ price.

a) is less than; is less than or equals

b) is less than; exceeds

c) exceeds; exceeds or equals

d) equals; is less than

2) What can we infer about the effect of an upcharge on movie tickets in the Sightline section on producer surplus and total surplus?

Producer surplus ___________ and total surplus ___________.

a) increases; decreases

b) increases; doesn’t change

c) doesn’t change; decreases

d) increases; increases

AMC Theaters Scraps Plans to Charge More for Good Seats

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