I think a lot of the discussion (including the accepted answer) is missing the point: how, _in the presence of competition_, is the theater able to profitably price discriminate. The competitive assumption is supposed to imply that price should be driven to cost. Without competition, any business will price discriminate if they can.
As others have pointed out, probably price of popcorn is not a big factor when choosing theaters. People don't have it in mind, or don't expect to buy popcorn (but then are suckered by the butter smell). It may come down to whether people are responsive to popcorn price; showing times and proximity are probably bigger factors.
Even if people were responsive to popcorn price deltas of ~$2, perhaps theater owners know that none of them has a unique ability to compete on popcorn price. Theater X can cut their prices, but theater Y can always respond and match it. As long as the cut is being matched, the theater does not "steal" any customers, and is only shedding revenue.
Two theaters can compete all the way down to marginal cost; what, $1 for a bag of popcorn? Let's say theater X has even better popcorn technology: it can produce popcorn for $.90, $.10 cheaper than anyone else. Still, theater X is not incentivized to sell their popcorn cheaper, since it is doubtful theater-goers will choose a venue based on $.10 off popcorn.
So with a little foresight, perhaps theaters realize none of them would profit by competition on popcorn prices. That's the other answer being kicked around: collusion.
As others have pointed out, probably price of popcorn is not a big factor when choosing theaters. People don't have it in mind, or don't expect to buy popcorn (but then are suckered by the butter smell). It may come down to whether people are responsive to popcorn price; showing times and proximity are probably bigger factors.
Even if people were responsive to popcorn price deltas of ~$2, perhaps theater owners know that none of them has a unique ability to compete on popcorn price. Theater X can cut their prices, but theater Y can always respond and match it. As long as the cut is being matched, the theater does not "steal" any customers, and is only shedding revenue.
Two theaters can compete all the way down to marginal cost; what, $1 for a bag of popcorn? Let's say theater X has even better popcorn technology: it can produce popcorn for $.90, $.10 cheaper than anyone else. Still, theater X is not incentivized to sell their popcorn cheaper, since it is doubtful theater-goers will choose a venue based on $.10 off popcorn.
So with a little foresight, perhaps theaters realize none of them would profit by competition on popcorn prices. That's the other answer being kicked around: collusion.