Movie tickets and popcorn are complementary goods. The price of corn, a good used in the production of popcorn, has fallen in price. Simultaneously, the rise of at-home streaming services have led movie theaters to decrease the amount of movies they offer. What is the result of these two events on the market for movie tickets?
(1 point)
• The market equilibrium price of movie tickets will definitely rise.
• The market equilibrium quantity of movie tickets will definitely fall.
• The market equilibrium price of movie tickets will definitely fall.
• The market equilibrium quantity of movie tickets will definitely rise.
Due to the decrease in the price of corn, which is used in the production of popcorn, the cost of producing popcorn decreases. This would lead to a decrease in the price of popcorn. Since movie tickets and popcorn are complementary goods, a decrease in the price of popcorn would increase the demand for popcorn, which would also increase the demand for movie tickets.
On the other hand, the decrease in the number of movies offered by theaters due to the rise of at-home streaming services would reduce the supply of movie tickets.
Considering these factors, it is difficult to determine the definite impact on the market equilibrium price and quantity of movie tickets. It is possible that the decrease in supply due to the decrease in the number of movies offered by theaters could offset the increase in demand caused by the decrease in the price of popcorn. Therefore, it is not certain whether the market equilibrium price of movie tickets will definitely rise or fall, or whether the market equilibrium quantity of movie tickets will definitely rise or fall.