Demand and Supply - Demand Shift pg-13
Demand Shifts Back when the Price of a Substitute Falls

Consider a consumer who prefers to go to the movies at night, but occasionally goes to day-time matinees, to save money. This consumer considers day-time matinees a substitute for night-time movies, but she prefers going at night.

The graph to the right is her demand for evening showings, the price of and demand for day-time matinees are not shown. When the price of day-time matinees is $5.00 per ticket, our consumer's demand for evening movies is given by demand curve D1. On demand curve D1, when day-time matinees cost $5.00, if evening showings cost $6.00 per ticket she goes to 15 evening showings per year, and when evening movies cost $12.00 she goes to 10 per year. If the price of matinees falls to $2.50 per ticket her demand for evening movies shifts back (decreases) to D2. On demand curve D2, when matinees cost $2.50 each, if evening showings cost $6.00 she goes to 7 evening showings per year, and if they cost $12.00 per ticket she only goes to 3 evening showings per year. We don't know how many matinees she sees because we only have her demand curves for evening showings.

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