What is the most likely effect of the development of DVDs, rental movies, and online movie streaming on the movie theater industry? A. Increased costs of producing movies B. Increased demand for movie theater tickets C. Movie theater tickets become an inferior good D. Increased price elasticity of demand for movie theater tickets
What is the most likely effect of the development of DVDs, rental movies, and online movie streaming on the movie theater industry? A. Increased costs of producing movies B. Increased demand for movie theater tickets C. Movie theater tickets become an inferior good D. Increased price elasticity of demand for movie theater tickets
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 9PA
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What is the most likely effect of the development of DVDs, rental movies, and online movie streaming on the movie theater industry?
A. Increased costs of producing movies
B. Increased demand for movie theater tickets
C. Movie theater tickets become an inferior good
D. Increased price elasticity of demand for movie theater tickets
Expert Solution
Step 1
The demand is inelastic when there are no close substitutes available and elastic when there are substitutes available for the product.
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