Why Theaters Could Have Popcorn Problems
At $160.5 million (not adjusting for inflation), Top Gun: Maverick set box office records for the Memorial holiday weekend, Whereas recent new releases had been attracting an 18–34 year old super hero crowd, Top Gun appealed to almost all of us except teenagers.
The upside is that we are back at the movies. But it could also be the downside.
If we are indeed back at the movies, then there might not be enough popcorn.
Requiring less pricey fertilizer, soybeans have become more attractive to some farmers than the corn they were growing for popcorn.
And then, you know the movies’ big popcorn bags?
Their manufacturers cannot get the sheen bag liners they need to prevent the melted butter from oozing through the paper. As a result, they might have to use more expensive metal or plastic containers. In addition, cups, nacho trays, and certain soda flavors could run short.
It all adds up to the remnants of the supply chain problems that were really bad during the past two years.
Our Bottom Line: Complements and Substitutes
As economists, we could call popcorn and the movies complementary products. A change in one shifts the other’s demand curve. So, if the farmers that grow the corn that becomes our fluffy butterfly popcorn grow less because they switch to soybeans, fewer popcorn lovers might go to the movies.
Below, the corn supply curve first shifts to the left. Increasing price and reducing the quantity demanded, that change in supply can affect its movie ticket complement if the demand for movie tickets decreases.
More simply, with complements, less of one means less of the other:
Meanwhile, on the farm, a substitute crop became a determinant of supply. The corn supply curve decreased because farmers instead planted soybeans. Somewhat misleading, when supply decreases (#1), the curve moves upward and to the left:
Returning to where we began, a popcorn shortage could be the downside of popular movies like the newest Top Gun.
Originally published at https://econlife.com on June 2, 2022.