Suppose that the price of a ticket to see a movie at the theatre increases, and assume the substitute product is an online movie rental at home.Other things equal, what is the most likely effect in the market for online movie rentals?

Question

Quizplus · Accepted Answer

An increase in the price of movie tickets will make going to the cinema less attractive and increase the demand for substitute products such as online movie rentals at home. Therefore, option B - an increase in demand for online movie rentals is the most likely effect in the market.

Suppose That the Price of a Ticket to See a Movie