Devise a pricing strategy to maximize the firms profits

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As a manager if a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is: P=15-0.001Q; on weekdays, it is P=10-0.001Q. You acquire legal rights from movie producers to show their films at a cost of $20,000 per movie, plus a $2 royalty for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). Devise a pricing strategy to maximize your firm's profits.

Reference no: EM13241856

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