Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?
A) The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
B) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase.
C) The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players.
D) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
Answer: B
You might also like to view...
Causation occurs when:
A) two variables tend to move in opposite directions. B) change in one variable is the reason for the change in another variable. C) two variables tend to move in the same direction. D) change in one variable does not cause any change in another variable.
The production possibility curve is bowed outward from the origin because of:
a. the law of increasing opportunity costs. b. the finite nature of the resource base. c. inefficiency. d. improper output mix. e. unemployment.