2. The puzzle 2.1. General characteristics of the puzzle A movie theater offers a spectrum of products, each of which is defined by the movie and its show time. On this spectrum of differentiated products, the short product life cycle of movies and uncertainty regarding their general appeal make it difficult to estimate accu- rately demand elasticities. Nevertheless, exhibitors can distinguish among certain clusters of products for pricing purposes. For example, while many moviegoers may be nearly indif- ferent between watching a particular movie on Tuesday or Wednesday, most moviegoers have strong preferences between shows of Friday night and Monday morning. Similarly, while many moviegoers may view two Christmas movies as very similar, most moviegoers are likely to have tastes for genres. Put simply, moviegoers have preferences for show times and for movies and, when making their consumption choices, the products they compare are particular movies in particular show times. With the exception of matinee discounts, the price to the consumer does not reflect these dimensions of product differentiation. Movie- goers normally pay one price for all movie tickets, regardless of the popularity of the movie, the day of the week, and the time of the year.