Assume That the Demand Curve for MP3 Players Shifts to the Right

question 178

Multiple Choice

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts to the left,but the supply curve shifts more than the demand curve.As a result,

• A) both the equilibrium price and quantity of MP3 players will decrease.
• B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.
• C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
• D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

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Definitions:

Public Good

A product or service that is available for all to consume, regardless of who pays and who doesn't, characterized by non-excludability and non-rivalry.

Free-ride

The act of benefiting from resources, goods, or services without paying for the cost of the benefit.

Rival

In economics, a good or service is considered rival if its consumption by one individual prevents simultaneous consumption by other individuals.

Excludable

Refers to a property of a good or service where it's possible to prevent people who have not paid for it from having access to it.