Final answer:
The opening of new nightclubs leads to a decrease in demand for movie tickets while the removal of a tax on entertainment businesses increases the supply of movie tickets. These changes will affect the market equilibrium, likely causing the equilibrium price to fall. The effect on equilibrium quantity depends on the relative shifts in demand and supply curves.
Step-by-step explanation:
When analyzing the effects of external factors on the supply and demand for movie tickets, we can see that both changes will affect the market equilibrium. In scenario a, the opening of three new nightclubs, which do not charge a cover fee and make money through sales of food and drink, creates an alternative entertainment option for consumers. As a result, there is a decrease in the demand for movies, demonstrated by a leftward shift in the demand curve, meaning at every price level, six fewer movie tickets will be demanded.
In scenario b, the removal of a tax on local entertainment businesses, including movie theaters, increases the quantity supplied of movie tickets. This situation can be graphically represented by a rightward shift in the supply curve by 10%, because at every price level, more movie tickets will be offered for sale.
Effects on Market Equilibrium
The equilibrium price and quantity in the movie ticket market will be affected by these shifts. With a decreased demand and increased supply, we can expect the equilibrium price to decrease, while the equilibrium quantity might either increase or decrease, depending on the relative magnitudes of the shifts in supply and demand curves.