What is the interpretation in terms of demand curves?

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  1. Graph the time series of attendance and prices for each Wednesday in 2001. What factors do you think account for the week-on-week differences in attendance for Cinemex and the city as a whole? What is the interpretation in terms of demand curves?
  2. (Illustrate with a diagram and explain—in words—what the diagram represents.)
    1. In Spring 2001, Cinemex’s main competitor introduced 2-for-1 pricing. Describe, in conceptual terms (and using a demand diagram), the effect this had on Cinemex’s demand curve. In the same diagram show the effect of Cinemex’s price response. Again, interpret your diagram in words

    3. How would you construct a counter-factual scenario for what would have happened had this 2-for-1 pricing by competitors not occurred? Explain your answer in terms of the diagram you drew in the previous question.

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