To analyze the effects of the given events on the market for movie tickets, we need to consider the impacts of each event:
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Falling price of corn: Since corn is a good used in the production of popcorn, a decrease in the price of corn would likely lead to a decrease in the production costs of popcorn. As popcorn is a complementary good to movie tickets, if popcorn becomes cheaper to make and sell, it may lead to a lower price for popcorn at movie theaters. This increased affordability of popcorn could encourage more people to go to the movies, potentially increasing the demand for movie tickets.
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Rise of at-home streaming services: The increase in at-home streaming options has led movie theaters to decrease the number of movies they offer. This indicates that the supply of movie tickets might decrease, causing upward pressure on ticket prices if demand remains steady.
Combining these two effects:
- The decrease in the price of corn (leading to cheaper popcorn) would likely increase the demand for movie tickets.
- The reduction in the number of movies available can decrease supply, leading to potential price increases or lower equilibrium quantities.
Given the simultaneous rise in popcorn demand (due to decreased prices) and decrease in supply (due to fewer offerings), we cannot definitively conclude about the price or the equilibrium quantity of movie tickets without knowing the relative magnitudes of these changes. Therefore, the most reasonable conclusion is:
The market equilibrium price of movie tickets will definitely rise.
This is due to decreased supply from fewer movies being offered, combined with an increase in demand because of cheaper popcorn.