Question

The supply and demand curves show data for the latest paperback edition in a popular young adult fiction series that has been turned into a film. Which change must be made to the graph if the publisher offers a complementary download of a song from the newest film version with purchase?

Answer 1

Shift D1 right, showing an increase in demand and an increase in equilibrium price.

Answer 2

Answer:

The demand curve should shift to the right, increasing the equilibrium price and the total quantity demanded.

Explanation:

When the demand curve shifts to the right, that means that the total demand will increase and the market price of the product or service will also increase at every level. The demand curve shifts to the right when consumers' income rises, the price of substitute goods rises, the price of complementary goods or services decrease, or the demand for complementary goods or services increases.

In this case the demand of a complementary good will decrease, since a song will be downloaded for free with the purchase of the book.