Business Studies Multiple Choice Question – 17 April 2022

In 2021, the Roxy Cinema reported a worldwide increase in box office revenue of 8%, whilst its retail sales of sweets increased by 12%.

Which one of the following is the MOST LIKELY reason for the increase in popcorn sales?

Select ONE answer:

1. Ice cream prices were reduced
2. Sweets are linked to gum disease
3. Incomes were falling
4. It is a complementary product

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – ice cream is a substitute for sweets and cheaper ice cream would reduce the demand for popcorn.
2. Not correct – if people are concerned for their health they would consume less popcorn.
3. Not correct – because falling incomes would normally reduce cinema attendance.
4. Correct – Complementary products’ use is related to the use of an associated or paired product, where using more of one item generates demand for the other. People who visit the cinema will often buy sweets which makes them complementary goods. The increase in revenue suggests more people attended the Roxy Cinema, thus increasing sales of sweets.

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