Unit VI Assignment Background Information

Ruby Red Theater is now starting to work on its marketing plan to draw more customers into the theater. Manager Tracy has provided you with the following information and asked for your help:

• There are four movie theaters in the town (Ruby Red, Grayson's Guild, Ryne's Reel 2 Reel, and Garrett's Dollar Movies).
• The city has passed a law banning any other movie theaters from building within the city limits.
• All movie theaters offer similar types of concession stand items at similar prices.
• The average ticket prices per movie at each theater are:

Movie Theater	Average Ticket Price
Ruby Red Movie Theater	$10.00
Grayson's Guild Movie Theater	$8.00
Ryne's Reel 2 Reel Movie Theater	$8.00
Garrett's Dollar Movies	$1.00

• The first movie and last movie start times for the four theaters are:

Movie Theater	First Start Time	Last Start Time
Ruby Red Movie Theater	12:00 noon	11:00 p.m.
Grayson's Guild Movie Theater	10:00 a.m.	11:00 p.m.
Ryne's Reel 2 Reel Movie Theater	10:00 a.m.	11:00 p.m.
Garrett's Dollar Movies	12:00 noon	11:00 p.m.

• The average number of people who purchase tickets at each movie theater in town per month is:

Movie Theater	Average Monthly Movie Ticket Sales
Ruby Red Movie Theater	15,000
Grayson's Guild Movie Theater	23,000
Ryne's Reel 2 Reel Movie Theater	25,750
Garrett's Dollar Movies	25,200

• Grayson's Guild and Ryne's Reel 2 Reel offer a special "Two-for-One Tuesday" where you can purchase two tickets for the price of one.
• Grayson's Guild and Ryne's Reel 2 Reel just purchased the latest Goldby Surround Sound for their movie theaters.
• You recall that your economics instructor at Columbia Southern University had presented you with a table that outlined the four market structure types and their characteristics. After searching through your old notes from Columbia Southern University, you found the table, which is presented below:

Characteristic	Perfect Competition	Monopolistic Competition	Oligopoly	Monopoly
Number of Firms	Vast	Many	Few Dominant Firms	One
Type of Product	Homogeneous	Differentiated	Differentiated	Unique, Limited, No Close Substitute
Size of Firm	Relatively Small	Relatively Small	Average to Large	Large
Market Share	Small	Small	Average/High	Absolute
Barriers to Entry and Exit	None	Low	High	Extreme
Price-Setting Power	None, Price Taker	Low, Price Maker	High, Price Maker	High, Price Maker
Long-Run Economic Profits	None	None	Possible	Possible