Suppose there is a small town with a population of 100,000 people, and the town has a single movie theater. The theater has a fixed capacity of 500 seats, and the price of a movie ticket is $10. The theater has no competition, so it is the only option for people in the town who want to watch a movie.

One day, a new multiplex cinema opens up on the outskirts of town, offering a wider selection of films and lower ticket prices of $8. The multiplex has a capacity of 1,000 seats.

Assuming that the demand for movie tickets is relatively inelastic (i.e., people are not very sensitive to changes in price), how will the entry of the multiplex cinema affect the town's original movie theater?

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