Recall the application about why movie popcorn costs so much,what happens with the high demander and low demanders if the movie theater were to lower the price of the popcorn from $4 to $0.10 and increase the admission from $10 to $12?
A)The low demander will still see the movie and buy popcorn.
B)The high demander will see the movie and buy popcorn same as the low demander.
C)The high demander will see the movie and buy popcorn and the low demander will not do either.
D)The high demander will not see the movie and buy popcorn.

Question

Quizplus · Accepted Answer

Since the price of popcorn has decreased significantly, the low demanders may be tempted to buy the popcorn. However, the increase in admission price may deter them from seeing the movie at all. On the other hand, the high demanders who were willing to pay the higher price for both the admission and the popcorn may continue to do so, hence they will still see the movie and buy popcorn. This leaves the low demanders not doing either, leading to a decrease in revenue. Therefore, option C is the most likely scenario.

Recall the Application About Why Movie Popcorn Costs So Much,what