Movie Theatres Charge Different People Different Prices

When a business sells something at different prices, we call it price discrimination. Great businesses want to charge people what they'll pay. So how does a movie theatre do that? Will they discover that people with jobs might pay up to 20 dollars for a movie ticket, but students might only pay up to ten dollars. If you follow the cost benefit principle, only buy a movie ticket if the ticket costs less than yourmarginal benefit. And so your reservation price is your marginal benefit.