If the price of popcorn at the movies suddenly doubles what

If the price of popcorn at the movies suddenly doubles, what would happen to the demand relationship for movies?

Choose: a. increases

            b. decreases

            c. does not change

Explain thoroughly indicating what type of relationship the two goods (movies and popcorn) have with each other.

Solution

b) decreases.

Popcorn and movies are complementary goods which jointly satisfy a particular want of consumer. Increase in price of popcorn reduces demand of movies and vice versa.