It has been predictable that movie theaters make earn 80% profit at the concession stand on overpriced popcorns as Movie Theater popcorns are called one of the biggest rips off with a retail price of nine times what it cost to make. The majority of the price charged for a movie ticket goes to studios and distribution companies and not the theatre as theatres are really in the popcorn and candy business, nowadays showing of films is just a way to gather a crowd and sell those popcorns and other snacks. Can we say this that theatres are shooting fish in a barrel by charging high prices on popcorns to an audience as they don’t permit to bring any eatable item they can charge anything they feel like. They will charge a price for popcorn bucket and the consumer will pay at its highest level.
Popcorn is a means to get you to compensate more
It is possible for profit from few moviegoers who pay an ample amount for popcorn to be worth more than many people who pay a nominal price. A monopolist has a sweet spot between demand, price, and cost that let him earn the maximum profit out of it. We should think of it that why popcorn is expensive at movies and we get to know that movie theatres use the high priced popcorn as a valuable tool and use this to price discriminate across moviegoers, as popcorn lets theatres charge different consumers different prices for going to movies, which help them to maximize profit. As different viewers have different willingness to pay and for there it would be fantastic as they could find out who would pay a lot to see a movie and can charge them extra.
Nowadays the mixed bundling is also done that means offering combo to the consumers that means the theatre charges the highest price it possibly can for soda and popcorn individually but offers a slight discount on the combo. By offering this combo with a little bit of discount the theatre captures all people who are still paying for it. Selling combos have its ultimate goal the role of forcing the people to separate into various groups so that they can be charged at different prices. As popcorns are salty and buttery so if you want popcorn you should also switch to buy a coke or a soda with it.
Main reason behind it
So we can say that popcorn is expensive at theaters because the theatres find themselves in concession business and so they find other ways to make money outside of ticket sales and the solution is to increase the price on food items which contribute to 85% of profit margin to them and that is why many people left the movie business and are now in popcorn business. The theater owners need these concessions profits to cover the dozen hidden costs such as the installation of sounds, employee wages, energy bills and other fixed costs. As the cost of operating and maintaining a movie, there has gone up so the price of popcorn and other eatables are also grown up.