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?
In: 2
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.
Latest Answers