Asked by Chaya Kohsuwan on Jul 20, 2024
Verified
Refer to Figure 16.1.1 above. The interdependence of these markets starts with a shift in the supply curve in the market for movie tickets, which is caused by:
A) an increase in the demand for DVDs.
B) a tax on movie tickets.
C) a decrease in the demand for DVDs.
D) an increase in the number of movie theaters.
Supply Curve
A graphical representation that shows the relationship between the price of a good and the quantity supplied by producers.
Demand for DVDs
The total quantity of DVDs that consumers are willing and able to purchase at a given price level over a specific period of time.
Movie Tickets
Certificates or electronic codes that grant the holder the right to admission for viewing a film at a cinema.
- Analyze the impact of taxes, subsidies, and shifts in supply and demand curves on market equilibrium.
- Recognize the effects of market interdependencies on general and partial equilibriums.
Verified Answer
TH
Taylor HarrisJul 27, 2024
Final Answer :
B
Explanation :
A tax on movie tickets will increase the cost of producing movies, leading to a decrease in supply (shift to the left) in the market for movie tickets. This, in turn, will lead to an increase in the equilibrium price of movie tickets and a decrease in the equilibrium quantity demanded. The decrease in the quantity demanded of movie tickets will also lead to a decrease in the demand for DVDs, resulting in a shift to the left of the demand curve in the market for DVDs. As a result, the equilibrium price of DVDs will decrease and the equilibrium quantity of DVDs will decrease. Therefore, the best choice is B, as it directly causes the shift in the supply curve of the movie tickets market and the subsequent shifts in the demand and supply curves of the DVD market.
Learning Objectives
- Analyze the impact of taxes, subsidies, and shifts in supply and demand curves on market equilibrium.
- Recognize the effects of market interdependencies on general and partial equilibriums.