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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Movie tickets and film streaming services are substitutes. If the price of film streaming increases, what happens in the market for movie tickets?

a. The supply curve shifts to the left.

b. The supply curve shifts to the right.

c. The demand curve shifts to the left.

d. The demand curve shifts to the right.

To determine
Change in price of substitute and its effect on the demand curve.

Explanation

Option (d):

Since movie tickets and film streaming services are substitutes, an increase in the price of film streaming services lead to an increase in the demand for the movie ticket. Thus, the demand curve of movie tickets shifts to the right. Thus, option ‘d’ is correct.

Option (a):

Supply curve is not affected by the change in the price of the substitute...

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