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By Using Graphs of Supply and Demand, show what will happen to the price and sales...

By Using Graphs of Supply and Demand, show what will happen to the price and sales in the movie theater prices if the following occur: (1) an increase in the price of DVD rentals, (2) Increase in the price of parking at the movie theater and (3) Increase in theater worker's wages. Explain what will happen to the shifts and/or movements in each case and then determine what happens to the sales and price of movie theater prices.

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Answer #1

1.DVDs and movie tickets are substitutes.A rise in price of DVD rentals will make movie tickets relatively cheap and increase its demand,thereby increasing price and quantity of movie tickets.

2.Parking tickets and movie tickets are complements.A rise in price of pricing tickets will make watching movies expensive,reducing its demand and causing both price and quantity to fall.

3.Higher wages increases cost of production, reducing supply, increasing price and reducing quantity.

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