Movie Concession Stands

May 21, 2013    •    2731 Views

Dear Alexa,

My friends and I went to the movies last weekend, and at the end of the night I realized I paid more for my popcorn, soda and candy, than I did for my actual movie ticket! Why are movie concessions stands so expensive?

Please Explain!

Well Kate, though you might not realize it, movie theatres have actually created their own monopoly.  This means that movie theatres across the country have taken control of supplying moviegoers with the junk food they love to munch on during the film. Have you ever noticed that many companies prohibit customers from bringing their own snacks into the theatre? Well this “movie etiquette” allows theatres to eliminate the competition that might be caused by substitute goods.  Preventing customers from bringing in their own food forces the customers’ demand for theatre popcorn, candy, and fountain soda to go up. Aside from creating their own monopoly and eliminating the possible demand for substitutes, theatres also have strategically priced the snacks at the concessions stands by looking at opportunity cost. The opportunity cost of something is what is given up to attain something else. Imagine this scenario, Kate: It is seven o’clock and you’ve just gotten home from play rehearsal.  Though your younger sister has planned to go see the showing of The Great Gatsby at 7:20pm at a local theatre, you realize if you stop to pick up cheaper snacks, your sister could potentially miss the first fifteen minutes of the movie.  While you think the price of the concessions snacks are completely outrageous, you decide that the opportunity cost, missing out on Leonardo Dicaprio’s gorgeous face, is much too high to stop for snacks. Thus, you decide to give your sister a few extra dollars for a snack at the cinema instead. You see Kate, movie theatres have won this battle. So unless you are willing to stuff your purse with skittles or give up that movie theatre popcorn that everyone loves so much, the movie theatre snacks will, unfortunately, continue to cost more than your actual ticket.

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