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)
Responses
a The market equilibrium price of movie tickets will definitely fall.
b The market equilibrium price of movie tickets will definitely rise
c The market equilibrium quantity of movie tickets will definitely fall.
d The market equilibrium quantity of movie tickets will definitely rise.
The correct answer is c) The market equilibrium quantity of movie tickets will definitely fall.
The decrease in the price of corn, a good used in the production of popcorn, will likely lead to lower production costs for popcorn. This will result in a decrease in the price of popcorn, which can be considered a decrease in the price of a complementary good. As a result, the demand for movie tickets, which are consumed together with popcorn, may decrease.
Additionally, the rise of at-home streaming services has led to a decrease in the number of movies offered by movie theaters. This could potentially decrease the overall demand for movie tickets as consumers have more options for entertainment at home.
Therefore, the combination of these two events is likely to lead to a decrease in the market equilibrium quantity of movie tickets.