Assuming Compact Discs and Cassettes Are Substitute Goods, a Decrease

question 135

Multiple Choice

Assuming compact discs and cassettes are substitute goods, a decrease in the price of cassettes will cause the demand curve for compact discs to:

• A) shift to the left as consumers switch from buying discs to cassettes.
• B) shift to the right as consumers switch from buying discs to cassettes.
• C) shift to the left as producers increase cassette production and reduce disc production.
• D) remain unchanged since discs and cassettes are sold in separate markets.

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