Optimal pricing strategies of monopolies

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Reference no: EM1315192

As a manager of a chain of movie theatres 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 theatres. On weekends, the inverse demand functions is P=24-0.006Q; on weekdays, it is P=16-0.006Q. You acquire legal rights from movie producers to show their films at a cost of $20,000 per movie, plus a $4 "royalty" for each moviegoer entering you're your theatres (the averages moviegoer in your market teaches a movie only once). Devise a pricing strategy to maximize your firm's profits.

Reference no: EM1315192

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