I*'m not assuming anything. I simply designed an arbitrary variable, based on the number of people who often state, "I'd go to the movies more, if tickets were less expensive". The other variables are so numerous, "Watson" probably couldn't predict them. In the end, this would need to be a real world, hands on experiment,. Here's a potential variable which "favors the house". Perhaps the theater is stuck with a "bomb". Word of mouth accelerates the roll off of attendance much sooner than projected. In which case, the lower ticket prices harm the profitability over time, much more than an A title "blockbuster" would. This paradigm, would obviously favor higher ticket prices, particularly in the face of diminishing sooner than anticipated ticket sales Not that it attaches to this business model, but gas stations pay a portion of their rent, based on a percentage per gallons, of gallons sold. Well, if I may be so bold, I'd like to suggest your, "spitball algebra", isn't even mathematically sound. The simple fact of the matter is, 10 * $15.00 = $150.00 20 * $7.50 is a direct reciprocal (20 * $7.50 also equals $150.00) Accordingly, 10 * $10.00 (fixed popcorn charges), = $100.00, and 12* $10.00 = $120.00. Thus, this line: "P = (20 tickets * $7.50) + (12 popcorn * $10) - 250 = $20", should read, P = (20 tickets * $7.50) + (12 popcorn * $10) - 250 = $70.00 No, they wouldn't at least not necessarily. Besides dude, you can only get away with bandying terms like, "elastic" and "regression" about, after you have mastered determining the correct answer to 6th grade mathematics. (Note, "6th grade math", may even be a bit charitable ).