What is the most likely effect of the development of rental movies and online movie streaming on the movie theater (or cinema)industry?
A)decreased 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

Question

Quizplus · Accepted Answer

The development of rental movies and online movie streaming provides consumers with more alternatives to watching movies, making them more sensitive to changes in movie theater ticket prices. This sensitivity reflects an increased price elasticity of demand for movie theater tickets, as consumers can easily switch to watching movies at home if the prices at theaters go up.

What Is the Most Likely Effect of the Development of Rental