Question

Student pricing at the movie theater is a common example of third-degree price discrimination. What is it about students, as compared to everyone else, that makes movie theaters want or need to charge them a lower price? Why is it important for movie theaters to make students show their IDs? Additionally, suppose a student could buy as many tickets as they wanted with their ID. How might that limit the theater’s ability to charge two drastically different prices for students and non-students?

Answer 1

In third degree price discrimination, the monopolizer charges totally different|completely different} costs to different teams of shoppers for an equivalent smart.Students have lower income as they're sometimes not earning cash and notwithstanding they're it's from a coffee paid half time job.

so that they dont have a great deal of cash to spare on picture show tickets.

However, if the arena doesn't lower the costs for college kids then it's going to happen that the seats go vacant and therefore it's far better to sell lesser

priced tickets to students than property the seat go vacant.

It is necessary for movie to ascertain student id as a result of otherwise even non-students may pass themselves off as students and take a look at to profit from

this is able to cut back the monopolists profit.

If a student is allowed obtain|to shop for} as several price ticket as he pleases then he would buy these tickets so sell them at a far higher costs to the non-students.

this is able to once more have an effect on monopolists profit.

Thus, they'd like to not charge students and non students one by one.