With the aid of supply and demand diagrams (you need an explicit diagram for each case), show
Question:
With the aid of supply and demand diagrams (you need an explicit diagram for each case), show and explain how and why we would expect prices and quantities to change in the market for Compact Discs (CDs) in each of the following situations when:
(a) Technical improvements lead to a fall in the cost of producing CDs.
(b) Technical improvements lead to a fall in the cost of producing MP3 players.
(c) Technical improvements lead to a fall in the cost of producing CD-players.
(d) Streaming music services, such as Spotify, AccuRadio, and Grooveshark, etc. become widely available
(e) Congress passes laws making streaming music services, such as Spotify, AccuRadio, and Grooveshark, etc. illegal.
COMMENT:
To make this assignment a bit easier for you, here is an excel file for your consideration with charts that show various shifts of supply and demand curves along with their effects on prices and quantities as equilibrium changes due to these shifts:
Expert Answer:
