NO MISSING REFERENCES FROM THE SITUATIONS.

MACROECONOMICS -PLEASE ATTACH ALL REFERENCES USED FOR ANY INFORMATION TO BE ANSWERED.

Situation 2: The technology to play pre-recorded movies

The technology for playing pre-recorded movies has progressed rapidly over the last 30 years. Video Cassette Recorders (VCRs) were introduced in Japan in 1976 and in the United States in 1977. As the first way to record television shows or play pre-recorded movies, VHS players were immensely popular. However, in 1997, digital video disc (DVD) players became available in the United States. DVDs can store more information than VHS tapes played on a VCR and can produce a sharper picture. Within a few years, DVD player sales were greater than VCR sales, and by 2006 movie studios had stopped releasing movies on VHS tapes. In 2006, Blu-ray players were introduced. Because Blu-ray discs can store up to 50 gigabytes of data, compared to less than 5 gigabytes on a typical DVD, Blu-ray players can play high-definition images that DVD players can't. When companies began selling VCRs, DVD players, and Blu-ray players, they initially charged high prices that fell rapidly within a few years. As this figure shows, the average price of a Blu-ray player was around $800 in May 2006, but had dropped to around $95 in 2013. Sales of Blu-ray players increased from around 425,000 in 2006 to 13.3 million in 2013. The figure shows that the decrease in price and increase in quantity were due to a large shift to the right of the supply curve. The supply curve in 2013 was much further to the right than the supply curve in 2006 for two reasons: first, after Samsung introduced the first Blu-ray playerat a price of $999other companies entered the industry , increasing the quantity supplied at each price. Second, the prices of parts used in the manufacture of Blu-ray players, particularly laser components, fell dramatically. As the cost of making the players decreased, the quantity supplied at all prices increased.