2. After launch, MicroSony decides to scale up production, reasoning that doing so will reduce their costs and increase prots. After scaling up production, they nd that their cost per console has dropped by $39.

a) Considering that MicroSony is still targetting a 5% loss on the variable costs of each console, does this reduction of costs aect either the supply or demand curves?

b) After scaling up production and decreasing their cost per console, MicroSony isn't sure if they should adjust their price or not. Is it possible for them to increase their monthly prot by changing the price of their console? If so, what price should they target?