who does supply and Demond set prices for experiences: such as movies, and concerts, and why are movie tickets the same price while concerts etc are different prices?
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The SELLER sets the price they think they can get for a good. The BUYER affirms or rejects the set price.
In your example, a ticket to a concert. Say it’s a small concert venue and they only have 500 seats. clearly the seats up front will be more expensive than those in back. If it’s a concert for “Cletus and the Local Yokels” – maybe the seller prices up front tickets at $25 and back row at $5. If the draw for the Cletus show is low, as you get closer and closer to the actual date of the concert, the seller will lower ticket prices to sell more.
Conversely, in the same room, say you get “A night with Ed Sheeran” – those 500 tickets are going to sell before the end of the hour. The seller knows that to get the most profit, they’ll sell front row tickets starting at $1000 and backrow for $750.
well basically in a concert venue, there are a certain number of seats. if you sell the tickets cheaply, you can easily fill all the seats – but you might have been able to fill them all anyway, at a higher price. if you make them super expensive then hardly anyone will buy them. so you’re looking for that sweet spot in the middle where enough people are willing to pay for tickets that the price times the number sold will be maximized. any time there is a limited number of something, either because it is a number of seats like that, or a product that is slow to produce, that’s the goal – there’s no point in trying to sell more than you have or can make.
i don’t know why movie tickets wouldn’t operate on this rule – charge less for a movie that is proving unpopular in order to entice people to come see it, charge more for something really popular. i can’t really think of a good reason not to, but idk.
Movie tickets aren’t always the same price. They will differ between locations because the market can demand a higher price. They also differ at the same theater based on movie times. Theaters will frequently have a lower price early in the day when demand is lower.
The variation in movie theater seat is much less than the variation in a concert’s seating, and supply is more elastic so theaters have other ways to maximize sales…
If the Rolling Stones are playing a concert in Boston, they are playing 1-2 shows and that’s it. So say a maximum of 40k seats and that’s it for this tour. Some people will be willing to pay $1000, others $100 so to maximize revenue they offer a variety of seats/prices so that those willing to pay top dollar can generate huge per seat revenues while still insuring they quickly sell out the shows.
Movies don’t have that inelasctic supply. There is always showing at a different time, different day, different theater. There’s one Rolling Stones concert, but there are 100 showtimes at 10 theaters for Spider-Man this Saturday. And there will be every night this week, and next weekend, too. So that’s like 1000 showings. Also, the economics of how theaters and studios split money (it’s 90/10 in favor of studios opening week, then 80/20, and so on) don’t justify the theaters taking the time to calculate supply/demand for each showing of each movie each day to determine a price given they’re keeping like $1.25 per ticket opening weekend.
The other users are right about the difference in availability of a concert vs a movie effecting the price, as well as the sizes of the venues. But one factor they’ve missed is *how* these forms of entertainment are arranged.
Concerts are arranged by a tour manager, who books the show into venues and agrees to what cut of the profits goes to the venue vs the performer. These can vary based on demand and how good each side is at negotiated. Also many arenas are operated as their own separate business. One company may own multiple arenas, but they get to operate more independently.
Meanwhile most movie theaters these days are chains, like AMC or Regal. The company as a whole negotiates with movie studios for the dispersion of the revenue, with majority of the box office going back to the studio. The theaters really make their money off the concession stand. So there’s little incentive to drive up the price of the tickets, because they want you to come in and buy food too.
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