Question

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.
a. true
b. false

Answer 1

I believe that the correct answer to this is:

“False”

 

If the price of a certain product or service increase and there are available substitutes to it, then the demand quantity for that product or service will decrease. So in this case, the equilibrium quantity would decrease hence false.