Q.1 According to the Pew Research Centre for People and the Press, increasingly more people, especially younger people, are obtaining their news from online and digital sources. The majority of U.S. adults now own smartphones or tablets, and most of those Americans say they use them in part to access the news. From 2004 to 2012, the share of Americans who reported obtaining their news from digital sources increased from 24% to 39%. How has this affected consumption of print news media, and radio and television news? Perform the analysis of this market in 4 steps as directed below.

Step-1 Develop a demand and supply model to think about what the market looked like before the event. The demand curve D and the supply curve S show the original relationships. In this case, you may perform the analysis without specific numbers on the price and quantity axis.

Step-2 Did the described change affect supply or demand? A change in tastes, from traditional news sources (print, radio, and television) to digital sources, caused a change in demand for the former.

Step-3 Was the effect on demand positive or negative? A shift to digital news sources will tend to mean a lower quantity demanded of traditional news sources at every given price, causing the demand curve for print and other traditional news sources to shift to the left, from D to D1.

Step 4. Compare the new equilibrium price and quantity to the original equilibrium price. The new equilibrium (El) occurs at a lower quantity and a lower price than the original equilibrium (E).