Why Movie Ticket Prices Are All the Same

Abstract

In almost any introductory economics textbook and course, students are regularly taught that in competitive markets, prices are determined by the laws of supply and demand. That is, prices will settle where markets clear, or at the price at which the quantity consumers are willing and able to buy exactly matches the quantity suppliers are willing and able to offer. If demand rises, the market price will rise, and vice versa. That kind of analysis doesn’t explain the constancy of movie ticket prices across movies, no matter how successful they are.