Positive Technological Change in the Production of LCD Televisions Caused

question 38

Multiple Choice

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions) ?

• A)The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
• B)The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase.
• C)The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players.
• D)The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

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Definitions:

Working Capital

Refers to the difference between a company's current assets and current liabilities, indicating its short-term liquidity and ability to fund its operations.

Financial Data

Information related to money matters of a company, including its revenue, expenses, profits, and losses.

Sales On Account

Transactions where goods or services are sold with payment to be received at a later date, typically recorded as accounts receivable on the balance sheet.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period.