Why do theatres discount prices on spare tickets just before a perfomance whereas airlines and rail companies raise prices for last minute customers?

Monday topic is too difficult to my brain to understand.

So yaaaay for Tuesday topic!

Let me think.

Demand for plane and train tickets is much more higher, because there always will be people who will need to get somewhere very quickly. The price for travel tickets is inelastic, because people sometimes HAVE TO travel even if they don't want: to pick up your grandmother from another city because she doesn't feel well and you have to look after her; to go to another country on special business meeting, about which you heard only this morning etc.

Theaters understand that possibility of buying tickets will not rise just before a perfomance starts (in general, I'm not talking about some really popular plays like Cats or something), so they have to low the price. If they low the price, the demand will rise and they will get some more money. If they don't low the price, the demand will fall and they won't get any money at all.

I'm so clever, aren't I?


chris sivewright said...

'low the price,'???



Mary said...

aaaah, ok!

chris sivewright said...

I hope you like the video and the powerpoint slides on market failure...

Mary said...

i haven't seen them yet.