7 The cost of producing TVs has fallen substantially over the past decade. Let's consider some implications of this fact.

a Use a supply-and-demand diagram to show the effect of falling production costs on the price and quantity of TVs sold.

b In your diagram, show what happens to consu mer surplus and producer surplus.

c Suppose the supply of TVs is very elastic. Who benefits most from falling production costs - consumers or producers of these TVs?