Question

What would happen to the equilibrium in the market for movies in movie theaters if consumption decreased this winter due to new stay-at-home orders and, at the same time, supply of new movies declined because of the past few months of lower productive activity.

Answer 1

There would be a decrease in equilibrium quantity of movies and an indeterminate change on equilibrium price of movies

Step-by-step explanation:

A a result of the decrease in consumption during winter, price of movies and quantity of movies would decrease. As a result of the decline in supply, prices would rise and quantity would fall.

Taking these two effects together, there would be a decrease in equilibrium quantity of movies and an indeterminate change on equilibrium price of movies

Please check the attached image for a graphical illustration