Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 10

You own a theater with 200 seats. The demand for seats is Q = 300 - 100P. You are charging $1.25 per ticket and selling tickets to 175 people. Your costs are fixed and do not depend on the number of people attending. Should you cut your price to fill the theater Explain. What other pricing policies might you use to increase your profits