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Rented DVDs and movies shown in theaters are substitutes

Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normalgoods. People watch rented DVDs more often in the winter than inthe summer. Most plasma TVs sold in the United States are importedfrom Japan. If the U… If the US decreases the amount of imported TVs, that means areduction in supply, therefore an increase in price. Thatalready takes out options B and D. Now, we need to find therelation between the TVs and rental DVDs. In the problem, itsays that they are… ents. Therefore, since this is true(and everything else is held constant, we know this because ofceteris paribus), there will be an increase in price on rentalDVDs. Answer C.

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