Private economic consultant for Ruby Red Movie Theater in town
You are continuing to serve as a private economic consultant for Ruby Red Movie Theater in town. The theater would like to have your input concerning what prices they should charge for movie tickets and the average prices for concession stand items. Access the Unit II Assignment Worksheet in Blackboard. Assignment Instructions: Complete the Unit II Assignment Worksheet. This worksheet contains a series of questions concerning your reviews of the movie ticket and concession items; be sure to answer them all and put your answers in the worksheet.
Once you have completed your worksheet, use the information you gathered there to write an assignment describing your calculations, what you suggest is the equilibrium price and quantity of movie tickets and concession items for Ruby Red Movie Theater, and factors that could cause the supply and demand curves to shift. Specifically, address the information from your worksheet when writing your assignment, as well as the following:
The movie theater manager has seen a dramatic decrease in the quantity of movie tickets and concession items purchased over the last year. Indicate the following:
two factors that might have caused the demand curve to shift to the left (decrease) for movie tickets, and
two factors that might have changed and caused the demand for concession items to shift to the left (decrease).
Your assignment must be at least two written pages, not counting the references page. Be sure to include an introduction and a title page. You are required to use at least two peer-reviewed scholarly sources. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. All references and citations used must be in APA Style. Copy and paste your assignment into the Word document on the page indicated at the end of the worksheet. This means that everything for this assignment—the completed worksheet, all graphs, and the completed assignment—should be provided in one Word document that you will upload via SafeAssign.
Sample Solution
As a private economic consultant for Ruby Red Movie Theater, I have analyzed their prices and supply levels of movie tickets and concession items in order to determine the equilibrium price and quantity. After completing the Unit II Assignment Worksheet, I have determined that the optimal pricing for movie tickets is $10.50 each and $4.00 for all concession stand items.
In terms of factors that may have caused demand for both movie tickets and concession items to decrease over the last year, there are several potential explanations. On a macroeconomic level, changes in consumer spending patterns due to fluctuations in income or shifts in job market trends can lead to an overall reduction in demand (Romer 2018). On the microeconomic side, increased competition from other theaters offering lower ticket prices or better amenities such as reclining seats could be another factor contributing to a decrease in ticket sales at Ruby Red (Arnold et al 2015). Additionally, technological advances such as streaming services like Netflix allow consumers more options when it comes to viewing media which could also contribute to a decline in theater attendance (De Peuter & Dutta 2019).
In regards to changes leading to decreased demand for concessions items specifically, it could be related both external factors beyond the control of Ruby Red or internal issues involving product quality or service efficiency at the theater itself (Alonzo-Lopez 2020). For instance if competitors offer larger sizes at lower costs people might opt for those instead of buying snacks from Ruby Red. Likewise if customer experience is poor due long wait times or inadequate staffing this could negatively affect purchases from the concession stand as well (Vazquez & Saridakis 2017).
Overall, these two factors suggest that adjustments must be made on multiple fronts if Ruby Red wishes to increase sales moving forward; therefore raising price levels alone will not be enough – management should consider exploring new strategies such as marketing campaigns aimed at existing customers who have not visited recently or discounts offered through loyalty programs which would make their offerings appear more attractive relative competitor options (Barone et al 2019) .
