You Are a Financial Analyst with a Specialization in the Motion

question 5

Essay

You are a financial analyst with a specialization in the motion picture industry. You have been hired to analyze the prices of movie theater tickets. The following two events are occurring simultaneously) in the United States:
(i) A new national chain opens new multi-screen movie theaters in most U.S. cities.
(ii) Movie theaters cut the price of popcorn and soft drinks in half.
a. Draw a demand-and-supply graph showing equilibrium in the market for movie tickets before the above two events take place. Label the axes and curves. Label the initial equilibrium - before events (i) and (ii)- as $P _ { 0 }$ and $Q _ { 0 }$ on your graph.
b. Now show on your graph how event (i) affects the demand or supply curves for movie tickets. Briefly explain which of the demand or supply variables caused the effect you are showing on your graph.
c. Now show on your graph how event (ii) affects the demand or supply curves for movie tickets. Briefly explain which of the demand or supply variables caused the effect you are showing on your graph.
d. Based on your graphic analysis, what do you predict will happen to the equilibrium price of movie tickets? The equilibrium quantity of movie tickets?

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Definitions:

Tower Of Hanoi

The Tower of Hanoi is a mathematical puzzle that consists of three pegs and a number of disks of different sizes which can slide onto any peg, with the objective being to move all the disks from one peg to another, obeying certain rules.

Recursive Algorithm

An algorithm that solves a problem by repeatedly calling itself with modified parameters until a base condition is met.

Tower Of Hanoi

A mathematical puzzle consisting of three rods and a number of disks of different sizes which need to be moved from one rod to another under specific rules.

Years

Units of time representing a period of approximately 365 days or 12 months, used to measure duration or age.