O households earn income. QUESTION 28 Refer to Scenario 3.1 below to answer the

Question

O households earn income. QUESTION 28 Refer to Scenario 3.1 below to answer the question(s) that follow. SCENARIO 3.1 Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer Refer to Scenario 3.1. In response to complaints from movie theater owners, the government removes an entertainment tax on movie tickets, but there are no additional taxes levied on rented DVDs. This would lead to o a decrease in the price of movie tickets, but no change in the rental price of DVDs O no change in the price of a movie ticket and a decrease in the rental price of DVDs O a decrease in the price of movie tickets and the rental price of DVDs O a decrease in the price of a movie ticket and an increase in the rental price of DVDs 2.0 QUESTION 29 Click Save and Submit to save and subait. Cliek Save Al Anstvers to sqve all arsuers arch

Explanation / Answer

Option 3

As the movie tickets and rented DVDs are substitutes, with the removal of entertainment tax, the price of movie tickets reduces, and inorder to compete with movie tickets, rented DVDs price also reduces.

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