Question

Recently, stores have been reporting increased sales of DVD players and a reduction in their prices. In accordance with this trend, one might predict that there has been a(n) ________ in demand and a(n) ___________ in supply.a. increase; no changeb. no change; increasec. decrease; no changed. no change; decrease

Answer 1

Answer:

B. there has been a no change in demand and a increase in supply.

Explanation:

It is not option A because an increase in demand and a no change in supply will increase the equilibrium quantity (sales) but the price will increase too. It is not option C because a decrease in demand and a no change in supply will decrease the equilibrium quantity (sales) and prices will decrease too. And it is not option D because if there is a no change in demand and a decrease in supply the equilibrium quantity (sales) will be reduced, and prices will increase.

It is option B because when there is an increase in supply in the Demand and Supply graph the supply curve shifts to the right, and if the demand remains constant this will traduce in a higher equilibrium quantity (sales) but a lower price.