The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 15

Some theatres presenting live drama have begun experimenting with "pay-what-you-can" pricing for certain performances. A theatre in San Diego adopted this policy for one Saturday matinee per production. Normal ticket prices run from $18 to $28. Payments for the special matinees ranged from 25 cents to $18.
(a) How do these theatres prevent everyone from taking advantage of the lower prices?
(b) Why would anyone pay $18 for a ticket that he or she could have purchased for 25 cents?
(c) Do you believe that people will really pay what they can under such a system? Do you think that wealthier people will on average pay more than poorer people?
(d) Many theatres sell steeply discounted tickets on the day of the performance. How do they keep all their patrons from waiting until the day of the performance to purchase tickets?