Answered step by step
Verified Expert Solution
Question
1 Approved Answer
If the price of MP3 downloads rises, people might be less inclined to buy MP3 players like iPods because the cost of using them (i.e.,
If the price of MP3 downloads rises, people might be less inclined to buy MP3 players like iPods because the cost of using them (i.e., the cost of the downloads) has increased. In this case, MP3 downloads and MP3 players are also complementary goods.
In a supply and demand diagram, the demand curve for MP3 players would shift to the left, indicating a decrease in demand. As a result, the equilibrium price and quantity of MP3 players would both decrease.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started