Suppose that you own a 25 year old movie theater in, Ask an Expert

Economics

Suppose that you own a 25 year old movie theater in Micropolis. It has 6 screens and a concession stand. Across town there is a 7 year old movie theater with 4 IMAX screens and 20 more regular screens. Your competitor’s movie theater also has stadium seating for all screens and two concessions stands. Remember this is a small to mid-sized city with a small to moderate sized customer base.

Do you think that your firm (the small theater) will have substantial pricing power based on being a monopolistic competition? What are your short-run and long-run profit expectations?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91372517

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