What Will Happen to the Equilibrium Price and Quantity of Traditional

question 111

Multiple Choice

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive,digital cameras become cheaper,the cost of the resources needed to manufacture traditional film falls,and more firms decide to manufacture traditional film?

• A)Price will fall,and the effect on quantity is ambiguous.
• B)Price will rise,and the effect on quantity is ambiguous.
• C)Quantity will fall,and the effect on price is ambiguous.
• D)Quantity will rise,and the effect on price is ambiguous.

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Definitions:

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, allowing them some power to set prices due to product differentiation.

Purely Competitive

A market structure characterized by many sellers offering identical products, with no single seller able to influence the market price.

Perfectly Elastic

A situation in which the quantity demanded or supplied responds infinitely or massively at a particular price point.

Herfindahl Index

A measure of market concentration used to determine the level of competition within an industry, calculated by summing the squares of the market shares for all firms in the market.