Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes, then which of the following is TRUE?
A)If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will fall.
B)If the price of a ticket to a Lakers game decreases, the quantity of Lakers tickets demanded will increase.
C)If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will remain unchanged.
D)The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert.

Question

Quizplus · Accepted Answer

The two events are substitutes, which means that consumers can choose between attending one or the other. If the price of attending a Lakers game decreases, it becomes more attractive relative to the Lady Gaga concert, leading to an increase in the quantity of Lakers tickets demanded. The demand for Lady Gaga tickets is not directly affected by the price of Lakers tickets, only by the relative attractiveness of the events. Therefore, choices A and C are incorrect. Choice D is incorrect as well, as prices for the two events are determined independently based on their own supply and demand conditions.

Suppose a Concert by Lady Gaga and a Basketball Game