Which in turn is how much the studios and distributors pay to make/market the film?
Which is in turn driven by costs...
Which are basically large bets on if a piece of art will have mass appeal.
Apparently the deal back then was that theatres had to buy films in packages. If you wanted the latest blockbuster, you had to buy a bunch of terrible dross, and commit to showing it X times.
Now, in reality there are second-hand effects, of course - like people getting adjusted to the below-cost ticket prices and being even less incentivized to buy at the normal price.
If it is free to show the movie then there is no penalty to running extra sessions. If it isn't free, someone is being paid. If that is a different someone to where ticket money goes they care more about sessions than viewings.
If you lower the price too much, you get a different sort of clientele. The sort of person who wrecks the place and annoys all the other patrons nearby.
Then the cleanup costs a lot. Often more than the amount of revenue collected on the room.
It absolutely makes more sense to keep the hotel room empty than to lower the price to keep it fully occupied.