Assume the opportunity cost of producing and providing cable and internet services declinesdue to new, improved technology in the industry.

QUESTION 1:

Given the reduction in the opportunity cost of production in the Market for Cable and Internet Services, answer the following questions without the support of or use of graphical analysis.

What do you expect to happen to the amount of cable and internet services sellers willing to produce and sell in the market? In other words, do you expect producers to be willing and able to produce more cable and internet services or less cable and internet services?

What will happen to the relative scarcityof cable and internet services? Are cable and internet services likely to become relatively scarcer or relatively less scarce?

Is the change in relative scarcity resulting from the buyer side of the market and/or the seller side of the market?

What do you expect to happen to the market price of cable and internet services?

What do you expect to happen to the amount of market exchange, that is, the amount of cable and internet services provided and purchased in the market?