The markets for movie theater tickets and videocassette rentals are highly interdependent. Suppose that a tax is imposed on movie theater tickets. The type of analysis that examines the effects of this tax on the markets for movie theater tickets and videocassettes simultaneously is called:

Question

Quizplus · Accepted Answer

General equilibrium analysis examines the interdependence of multiple markets and the effects of changes in one market on other related markets. In this case, the tax on movie theater tickets would likely lead to an increase in demand for videocassette rentals as consumers seek alternative ways to access movies. A general equilibrium analysis would consider the impacts on both markets simultaneously.

The Markets for Movie Theater Tickets and Videocassette Rentals Are