Friday, June 29, 2007

Will that be a large?

Concession stands at movie theatres are a great source of conversation among economists. While I am a strong believer in the consumer driven free market idea, I am still struggling to understand the simple idea behind higher prices of candy and soda in cinema halls. I can understand product differentiation, and bundling as an argument. I must be pretty dense if I do not get Landsburg's idea in The Armchair Economist. Here is an interesting article from Slate about the history of concession stands. It is interesting to note that there was a period when cinema hall owners were against the idea of food in the theatre. Of course! I always succumb when asked the question in the title. Do you?

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