You manage a movie theater that can handle up to 8,000 patrons per week. The current demand, price, and elasticity for ticket sales, popcorn, soda, and candy are given in given Figure. The theater keeps 45 percent of ticket revenues. Unit cost per ticket, popcorn sales, candy sales, and soda sales are also given.
Assuming linear demand curves, how can the theater maximize profits? Demand for foods is the fraction of patrons who purchase the given food.
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Elasticity
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Current price
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demand
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Cost
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Ticket percentage
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Keep 45%
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Ticket
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3
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8
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3000
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0
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0.45
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Popcorn
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1.3
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3.5
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0.5
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0.4
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Soda
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1.5
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3
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0.6
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0.6
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candy
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2.5
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2.5
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0.2
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1
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