Horizontal contracts often
a. Increase competition between substitute products
b. Eliminate competition between substitute products
c. Do not change the competition between substitute products
d. None of the above
Question 2
Assume that the price elasticity of demand for movie theatres is -.85 during all evening shows but for all afternoon shows the price elasticity of demand is -2.28 . For the theatre to maximize total revenue, it should
a. Charge the same price for both shows, holding other things constant.
b. Charge a higher price for the afternoon shows and lower price for the evening shows, holding other things constant
c. Charge a lower price for the afternoon shows and higher price for the evening shows, holding other things constant
d. Need more information
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