To conduct an experiment, AMC increased movie ticket prices from $9.00 to $10.00

Question

To conduct an experiment, AMC increased movie ticket prices from $9.00 to $10.00 and mea- sured the change in ticket sales. Using the data over the following month, they concluded that the increase was profitable. However, over the subsequent months, they changed their minds and discontinued the experiment. How did the timing affect their conclusion about the profitability of increasing prices? To conduct an experiment, AMC increased movie ticket prices from $9.00 to $10.00 and mea- sured the change in ticket sales. Using the data over the following month, they concluded that the increase was profitable. However, over the subsequent months, they changed their minds and discontinued the experiment. How did the timing affect their conclusion about the profitability of increasing prices? To conduct an experiment, AMC increased movie ticket prices from $9.00 to $10.00 and mea- sured the change in ticket sales. Using the data over the following month, they concluded that the increase was profitable. However, over the subsequent months, they changed their minds and discontinued the experiment. How did the timing affect their conclusion about the profitability of increasing prices?

Explanation / Answer

We know that there is inverse relationship between price and quantity demanded. When price of the commodity increases the quantity demanded of the commodity will be decreasing and vice versa. In this case The AMC was increased the price of movie ticket by $9.00 to $10.00. That means the overt ime quantity of consuming the movie ticket will be decreasing. We know that every consumer buy a product when the price is lesser. But in the higher price they consume less.

In the conclusion of profitability the first periode the AMC get profit from the sale of movie ticket. But after a certain periode they will consumer cannot going to theaters. This will reduce the profitability of AMC.

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