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<p>Answer the following six questions. 1. "Zygi Kamasa, head of Lionsgate UK, whose films include The

Hunger Games and Postman Pat, said prices at the box office should reflect film budgets...In most other industries, retail price is related to the cost of production, but not in the film business... A blockbuster can cost $250m and a UK independent film can cost $4m but it's £10 or more to see both."  Is it true that the admission price of a film should reflect its budget? For instance, should a film that costs $250m to make have a higher ticket price higher than a film that costs $4m? 2. "If you introduce pricing according to budget, cinemas are naturally going to show the blockbusters to get a higher revenue."  Suppose that a new pricing policy is adopted - the price for big budget films is increased from the current level and the price for small budget films is decreased. Does that mean that the revenues from big budget films will go up, while the revenues from small budget films will go down? 3. "... it includes special deals like buy-one-get-one-free and daytime discounts."  Why are there special deals on movies? 4. "The profit from a cinema ticket, once VAT is deducted, is split between the cinema chain and the distributor. The cinema chain sets the price of the ticket and the cost varies depending on several factors - from screen and seat size to the cost of renting the venue." Suppose that: a. Demand for a movie at a particular venue is described by

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