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damaskus [11]
2 years ago
11

Assume that new technology develops a substitute for DVDs. How will the price elasticity of demand for DVDs be impacted?

Business
1 answer:
Phoenix [80]2 years ago
3 0

<u>Answer:</u>

b. The appearance of a substitute for DVDs with increase the elasticity coefficient for DVDs.

<u>Explanation:</u>

"Price elasticity of demand" refers to the proportion of a product's percentage change in demand quantity in relation to the percentage change in the good's price. Rates are fixed in a market economy by commodity supply and demand factors.

Markets consist of producers and consumers. Our analysis of buyers' behaviour is focused on demand curves; supply curves reflect sellers' behaviour. The lesser the good's price, the greater the quantity consumers want to buy, as per the “law of demand”.

If a new technology substitutes the DVD, which leads to decrease in their demand. This further leads to the increase in price. Assuming the elasticity is 3.0, a price increase of 10 percent will lower the demand quantity by 30 percent (30 percent/10 percent or 3.0). Thus, the DVD’s elasticity coefficient will increase.

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Weak Form of Efficiency Market Hypothesis states that individuals cannot use past knowledge, facts, or occurrence about stock to determine its future price.

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3 years ago
Suppose in 1992, the average price level in Pacifica was 100, and that in Atlantica it was also 100. In the foreign exchange mar
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This can also be stated differently that 1  Atlantica mark should equal to 0.78 Pacifica pound, i.e. 0.78 Pound/Mark.

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