Exercise on Shifts in Demand and Supply: Solution-2 (Event B)

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 B: Sellers of games downloads negotiate a reduction in the royalties they must pay for each game they sell.

    Steps
  1. S curve shifts
  2. Royalties are included in the sellers' costs
  3. P decreases, Q increases
 market-game-download-2


For more details, please contact me here.
Date of last modification: 2019