A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it
A)can prevent children from buying the lower-priced tickets and selling them to adults.
B)has some degree of monopoly pricing power.
C)can easily distinguish between the two groups of customers.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Price discrimination requires the ability to differentiate between customers and charge them different prices. A movie theater can prevent children from buying the lower-priced tickets and selling them to adults by asking for age verification, which is easy to do. Additionally, a movie theater has some degree of monopoly pricing power as there may not be many theaters in the area, allowing them to charge different prices to different groups. Therefore, all options are correct in this scenario.

A Movie Theater Can Increase Its Profits Through Price Discrimination