What effect will the invention of a music player have on the equilibrium quantity of CD...
What effect will the invention of a music player have on the equilibrium quantity of CD players bought and sold and on the price of CD players? Why? (Hint: please be clear to show the effects on quantity bought and sold and also on the price of CD players. Use a graph).
Homework Answers
The invention of a music player will cause the demand curve to move to the left i.e the demand for the CD players will fall down as the music player is a substitute for the CD player.
The equilibrium quantity will decrease from Q* to Q1.The price of the CD players will also decrease from its equilibrium value.
D is the demand curve and S is the supply curve for the CD players .The equilibrium quantity is Q* and price is P*.
With the introduction of music players ,the demand curve moves to the left and the new demand curve is D'.The new equilibrium quantity is Q1 and price is P1.
This occurs the demand of product decreases when the substitutes products are introduced into the market and consumers start using these new substitutes.
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What effect will the invention of a music player have on the
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