PE D R E S E A RC H
PR O J E C T
NAITIK C HOU DHARY
WHY ARE MOVIES TICKETS MORE
EXPENSIVE ON WEEKENDS THAN
WEEKDAYS?
• MOVIE TICKETS BEING MORE EXPENSIVE ON THE WEEKENDS THAN THE WEEKDAYS CAN
BE EXPLAINED BY THE CONCEPT OF PED ( PRICE ELASTICITY OF DEMAND) .
• WE WILL BE EXPLORING THIS CONCEPT WITH THE USE OF A REAL LIFE EXAMPLE: THE
TICKETS OF THE NEW MOVIE JOLLY LLB 3.
IN FIGURE 1, WE CAN SEE HOW A TICKET ON 28TH SEPTEMBER, A SUNDAY IS PRICED AT ₹650
FOR THE ROYAL RECLINER SEATS. THIS CAN BE EXPLAINED AS DURING WEEKENDS, PEOPLE
USUALLY HAVE HOLIDAYS FROM SCHOOL OR WORK HENCE HAVE FREE TIME AND CRAVE
LEISURE. THEREFORE, IN ORDER TO HAVE A BREAK AND A GOOD TIME DURING THE
WEEKENDS, THE CONSUMERS ARE LESS RESPONSIVE TO PRICE MAKING THE PED INELASTIC
AND LESS THAN 1. THIS WOULD MEAN THAT A % CHANGE IN PRICE WILL HAVE A LOWER %
CHANGE IN QUANTITY DEMANDED. THEREFORE, AS COMPANIES LIKE PVR ARE PRODUCERS
AND AIM TO MAXIMIZE PROFITS, THEY IMPOSE HIGHER PRICES, KNOWING THAT THE PEOPLE
COMING TO WATCH MOVIES WILL NOT DECREASE BY MUCH, AND HENCE AS A RESULT FIGURE 1
MAXIMIZE THEIR TOTAL REVENUE.
WHY ARE MOVIES TICKETS MORE
EXPENSIVE ON WEEKENDS THAN
WEEKDAYS?
ON THE OTHER HAND, ON WEEKDAYS, AS SEEN IN FIGURE 2, THE PRICES OF THE
MOVIE TICKETS FALL TO AS LOW AS ₹180. THIS IS AGAIN EXPLAINED WITH THE HELP
OF PED WHERE THE CONSUMERS ON THE WEEKDAYS MAY HAVE WORK OR SCHOOL
TO ATTEND HENCE WILL HAVE LESS FREE TIME TO GO WATCH A MOVIE. THEREFORE,
ANY CHANGES IN PRICE WILL LEAD TO A GREATER % CHANGE IN DEMAND.
FURTHER, MOVIES MAY ALSO HAVE A LOT OF SUBSTITUES AS A CINEMA SCREENS
MULTIPLE MOVIES AT THE SAME TIME, AND MOVIES ARE USALLY FOR LEISURE AND
A LUXURY AND NOT A NEED FOR A CONSUMER. THIS WOULD MEAN THAT THE PED IS
ELASTIC AND GREATER THAN 1, HENCE PRODUCERS LIKE PVR DECREASE THEIR
PRICES IN ORDER TO ATTRACT AND INCENTIVIZE PEOPLE TO STILL COME AND
WATCH THE MOVIE AS IT IS PRICED SO LOW. THIS WILL HELP INCREASE OR MAINTAIN
THE TOTAL REVENUE OF THE PRODUCERS ACCORDING TO THE LAW OF DEMAND.
FIGURE 2
WHY ARE AIRPLANE TICKETS MORE EXPENSIVE
•
AT IMMEDIATE TRAVEL AND DURING FESTIVALS
FLIGHT TICKETS BEING MORE EXPENSIVE IF BOOKED FOR IMMEDIATE TRAVEL THAN
FUTURE ONES CAN BE EXPLAINED BY THE CONCEPT OF PED.
• IN FIGURE 3, IT IS SEEN THAT AN IMMEDIATE FLIGHT ON THE 28TH OF SEPTEMBER IS
PRICED AT ₹16,526. WHILE ACCORDING TO FIGURE 4, A FLIGHT TICKET ON 10TH OCTOBER IS
PRICED AT ALMOST HALF THE PRICE AT ₹8,367.
• THIS PRICE INCREASE OCCURS BECAUSE CONSUMERS BOOKING FLIGHTS LATE DO NOT HAVE A
LOT OF SUBSTITUES AS OTHER FLIGHTS MAY BE FULL HENCE LIMITING THEIR OPTIONS AND Figure 3
CHOICES TO CHOOSE THE FLIGHTS WITH THE LOWEST PRICE. ALSO, THE LATE BOOKING MAY BE
AN INDICATOR OF A NECESSITY WHERE THE CONSUMER HAS TO GO KOLKATA IMMEDIATELY
FROM MUMBAI POSSIBILY DUE TO AN EMERGENCY. THEREFORE, ALL OF THESE FACTORS MAKE
THE PED INELASTIC. AIRLINE COMPANIES LIKE AIR INDIA THEREFORE TAKE ADVANTAGE OF
THIS AND IN ORDER TO MAXIMISE THEIR TOTAL REVENUE, THEY INCREASE THE PRICE OF
TICKETS TO ₹16,526. ON THE OTHER HAND, FOR FUTURE TRAVELS, THE CUSTOMERS MAY HAVE
A LOT OF OPTIONS OF AIRLINE COMPANIES TO CHOOSE FROM, THEREFORE A LOT OF AVAILABLE
TIME. THIS WILL ALLOW THEM TO CHOOSE TICKETS WITH THE LOWEST PRICE. HENCE,
Figure 4
ULTIMATELY MAKING PED ELASTIC AND THEREFORE TO REMAIN COMPETITIVE AND ATTRACT
PASSENGERS, AIRLINES COMPANIES LIKE AIR INDIA DECREASE THEIR PRICES TO ₹8,367.
WHY ARE AIRPLANE TICKETS MORE EXPENSIVE
AT IMMEDIATE TRAVEL AND DURING FESTIVALS
• FURTHER, AIRLINE TICKETS MAY ALSO BE AFFECTED BY FESTIVALS OR HOLIDAYS.
DURING FESTIVALS LIKE DURGA PUJA, THE FLIGHT TICKETS TO KOLKATA ARE USUALLY
HIGHER THAN OTHER TIME PERIODS. IN FIGURE 5, THE FLIGHT ON OCTOBER 15 TH FROM
MUMBAI TO KOLKATA IS PRICED AT ₹10,817 WHILE A FLIGHT ON NOVEMBER 2 ND IS ONLY
PRICED AT ₹5,099 ACCORDING TO FIGURE 6. . THIS MAY BE BECAUSE OCTOBER 15 TH COMES
DURING DIWALI AND DURGA PUJA, THAT ARE COMMONLY CELEBRATED FESTIVALS IN
INDIA. THE TICKETS ARE PRICED HIGHER THAN NORMAL AS DURING FESTIVALS, PEOPLE
TEND TO TRAVEL MORE AS PEOPLE MAY RECEIVE HOLIDAYS FROM SCHOOL OR
WORKPLACE THEREFORE ALLOWING FOR MORE FREE TIME AND THE WANT FOR LEISURE. Figure 5
THIS LEADS TO PEOPLE BEING LESS RESPONSIVE TO CHANGES IN PRICES HENCE LEADING
TO THE DEMAND BECOMING PRICE INELASTIC. ULTIMATELY, TO MAXMISE TOTAL
REVENUE THE AIRLINES INCREASE THEIR PRICES.
• THESE STRATEGIES COMES UNDER DYNAMIC PRICING WHERE THE AIRLINES CHANGE
THE PRICES OF FLIGHTS ACCORDING TO MARKET CONDITIONS. FOR EXAMPLE: DURING
FESTIVALS DUE TO HIGHER DEMAND FOR FLIGHTS, A HIGHER PRICE FOR THE FLIGHTS
WILL BE CHARGED. Figure 6
