There are a few firms selling differentiated products in a monopolistically competitive industry.
Answer the following statement true (T) or false (F)
False
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Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will
A) decrease the number of sodas bought and the demand curve for sodas will shift leftward. B) decrease the number of sodas bought and move along the demand curve for soda. C) buy more pizza and move along the demand curve for pizza. D) buy less pizza and the demand curve for pizza will shift leftward.
Computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases
How do these changes affect the price and quantity of computer software?