Web Links

Issues and Applications—Web Resources:

• To see an assessment of the profit opportunities available to entrepreneurs contemplating opening digital photo printing kiosks in the mid-2000s, go to http://www.photoreporter.com/.
• For a pessimistic forecast indicating that the recent expansion of the digital photo printing industry could eventually be reversed, go to http://www.capv.com/home/Press/itPress/2005/6.21.05.html

The Cost Structure of the Movie Theater Business

A key idea in this chapter is that competition among firms in an industry can influence the long-run cost structure within the industry. Here you get a chance to apply this concept to a multinational company that owns movie theaters.

Title: AMC International

Navigation: Use http://www.amctheatres.com/ to visit American Multi-Cinema's home page.

Application: Answer the following questions.

1. Click on Investor Resources. What is the average number of screens in an AMC theater? How many theaters does it own and manage?

2. Click on Locations Worldwide, and use the map to select the theater in Hong Kong. This is the largest megaplex theater in the region. How many screens does the megaplex have?

3. Based on the average number of screens at an AMC theater and the number of screens at the Hong Kong facility, what can you conclude about the cost structure of this industry? Illustrate the long-run average cost curve for this industry.