Chapter 7, Problem 24AA

a)

To determine

To evaluate: The reasons behind falling demand for movie.

Explanation of Solution

The numerous factors influencing films include producer, production house, director, cast, film length, genre, script, release date and last but not least, marketing. All these aspects play a very important role in deciding how the films work. From the above image can be conclude the reason for dropping the demand for movie could be that the ticket price is too expensive to purchase.

Economics Concept Introduction

Introduction: A good plan for social media is an integral part of the film kit and plays a very important role in making film a success. But producers who do not know the new social media strategy of today face many difficulties in engaging with media houses and promoting their film on social media.

b)

To determine

To evaluate: The other reasons that could be for the fewer people going to see the movies.

Explanation of Solution

Customers aren't likely to spend the money watching a movie in the cinemas; they’d rather spend it in other ways, like: cooking, renting, etc. Since the ticket is costly, some cannot afford it; this is one of the reasons why less people go to the cinemas than before.

Economics Concept Introduction

Introduction: The law of demand help to know how much demand will fall to a given level by price increases, and how much it will grow by product price decreases. It lets the management determine how many product price rises or declines are beneficial.

c)

To determine

To evaluate: the response of the producers when the demand for movies continues to drop.

Explanation of Solution

The producers can use many strategies like they can give advertisement of the films in various social media, providing some discount on the tickets, delivering speech regarding the importance of their movie.

Economics Concept Introduction

Introduction: Movies are one of the key sources of entertainment, and they play a very important role in inspiring and educating us in different life fields. Movies are like a mirror to society, and act as a social activator sometimes.