Question

1. Movie theaters industry is currently not doing well. Write about why is this industry doing poorly using supply and demand concepts? Provide a well-labeled supply and demand diagram that demonstrates what you are talking about.

2. Explain whether the industry you have chosen has a small or large impact on the entire economy. Why or why not? Should a macroeconomist be concerned about what is happening in your industry? Explain.

Answer 1

1. Due to Covid pandemic, an unprecedented situation has arised in which people are restraining themselves from any physical contact. Due to this, people are staying at home, due to which industries like movie theaters, restaurants, shopping malls, etc. have seen a plunge in demand. This causes the demnad curve to shift leftward, so the quantity and price both decrease.This leads to a situation for the movie theaters have low total revenue and a high operating cost. That's why movie theaters industry is currently not doing well.

This is shown in the following diagram.

2. Movie theaters industry has nuancical impact on the economy. It is closely knitted with the following other streams of the sae industry, for example, movie stars, directors, production houses, cameramen, etc. Additionally, there are poeple employed within the movie theatres as well. There will be a combined impact on employment of the above listed categories. This tells us that there is a significant impact of the movie theaters industry from a macroeconomic perspective.