Answered: 5. Movie tickets and DVDs are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Movie tickets and DVDs are substitutes. If the price of DVDs increases, what happens in the market for movie tickets?

Select one:

a. The supply curve shifts to the left.

b. The demand curve shifts to the left.

c. The supply curve shifts to the right.

d. The demand curve shifts to the right.

Expert Solution

Step 1: Defined demand and supply

Demand is the desire backed by a willingness to pay and the ability to pay by an individual. The summation of all individual demand curves is known as market demand. As price increases market demand will decrease and vice versa.

Supply is defined as the amount of goods that are produced in the place for consumption by an individual. It shows the direct relationship between price and quantity suppliers. A major determinant that affects supply is the price of the commodity.

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