Exercise on Shifts in Demand and Supply: Solution-1 (Event A)

Questions: Use the three-step method to analyze the effects of each event on the equilibrium price and quantity of game downloads.

  1. Event A: A fall in the price of USBs
  2. Event B: Sellers of games downloads negotiate a reduction in the royalties they must pay for each game they sell.
  3. Event C: Events A and B both occur.
Solutions:

Event A: A fall in the price of USBs

    Steps
  1. D curve shifts
  2. D shifts left
  3. P and Q both fall.
 market-game-download


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Date of last modification: 2019