File sharing software threatens the music industry in part because artists will not be fully compensating for their recording of songs. Suppose that the government decides that file sharing software products are legal anyway.
(a) The almost immediate result will be that artists start earning very little money for their recordings but they continue to earn money for live performances. How will income change for the music industry? How does your answer relate to the superstar phenomenon?
(b) Although one would expect lower prices to benefit the music-listening public if the government decides that file sharing software products are legal, in what way(s) could the music-listening public also be hurt from the policy?