File-sharing programs such as Napster, Kazaa, and iMesh make it possible for individuals to exchange music files over the Intern
et. All else constant, which of the following statements best describes how the development of these programs has affected the retail market for new music CDs? A) Demand for CDs has decreased, causing equilibrium price and quantity to decrease. B) Demand for CDs has increased, causing equilibrium price and quantity to increase. C) Demand for CDs has decreased, causing equilibrium price to decrease and equilibrium quantity to increase. D) Demand for CDs has increased, causing equilibrium price to increase and equilibrium quantity to decrease
Option A) Demand for CDs has decreased, causing equilibrium price and quantity to decrease.
is the correct answer.
Explanation:
File-sharing is a common practice nowadays. It helps us by providing access to different files (audio , video, images, documents) to others in a faster way.
A wide range of files are shared daily by using different means of file-sharing including computer networks and peer-to-peer networking.
Formerly, the data was shared using CDs but now this system has been replaced with the advent of internet.
Usage of CDs is dropped drastically and hence their demand is decreased.
So now the prices of CDs are not in equilibrium and their quantity is also decreased.
