- January 18, 2017
Cinema popcorn is priced at 900% more than the cost to make it, on average.
Popcorn’s huge markup actually keeps cinemas running. They hardly make anything back on the price of your ticket.
Researchers offered a study group two sizes of popcorn.
The majority bought the small size. When asked why, they responded that the large was too expensive, or that they weren’t hungry enough to eat it all.
Researchers offered another study group three sizes of popcorn.
The majority bought the large size. When asked why, they responded that $0.50 difference meant the large represented better value over medium.
This decoy pricing also works in other industries, such as wine and tech products.
In these examples, the low and high versions are the decoys, luring you towards the version with the highest markup, creating most profit for the company.
McDonalds / Burger King do this with their Large / Supersize meals. You pay a little more, but don’t really get anything extra for it (a couple more chips, or a lot more ice).