Multiple Choice:

If the price of movies on video rises while the price of movies on DVD remains the same, the law of demand predicts that consumers will:
A) substitute movies on video for movies on DVD.

B) substitute movies on DVD for movies on video.
C) buy only movies on video.

D) buy only movies on DVD.

Take a shot.

B

To understand why the answer is B) substitute movies on DVD for movies on video, we need to explain the concept of the law of demand. The law of demand states that as the price of a good or service increases, the quantity demanded for that good or service decreases, assuming all other factors remain constant. Conversely, as the price of a good or service decreases, the quantity demanded increases.

In this multiple-choice question, the price of movies on video has risen while the price of movies on DVD remains the same. Since the price of movies on video has increased, consumers are likely to view it as a less attractive option compared to movies on DVD, which have the same price as before. Therefore, consumers will likely substitute movies on DVD for movies on video. This means that consumers will choose to buy movies on DVD instead of movies on video, as movies on DVD offer a better value for money due to their lower price.

Hence, the correct answer to the question is B) substitute movies on DVD for movies on video.