To analyze the impact of the two events on the market for movie tickets, we need to consider what each event implies for supply and demand.
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Falling price of corn: This decrease in the price of a key input for popcorn production would likely lead to a decrease in the production costs for popcorn, making it cheaper to produce. Since movie tickets and popcorn are complementary goods, when the cost of popcorn decreases, more people may opt to buy popcorn when going to the movies. This can potentially increase the demand for movie tickets as people are enticed to go out to the theater for the complete experience.
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Decrease in the number of movies offered by theaters: The decline in the number of films available will likely reduce the demand for movie tickets, as fewer options could lead to decreased interest in going to the theater.
Considering these two opposing forces:
- The increase in demand for movie tickets from cheaper popcorn could push the quantity demanded upward.
- The decrease in the number of movie options available could push the quantity demanded downward.
Without specific information on the magnitude of these changes, we can't definitively predict what will happen to the equilibrium price or quantity. However, it's plausible that the decrease in movie options would have a stronger negative impact on the demand for movie tickets than the positive effects from lower popcorn prices.
Given this analysis, it's reasonable to conclude:
The market equilibrium quantity of movie tickets will definitely fall.
So the correct response would be: The market equilibrium quantity of movie tickets will definitely fall.
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