Positive technological change in the production of OLED televisions caused the price of OLED televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to OLED 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 OLED televisions and Blu-ray players.
D) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

Question

Quizplus · Accepted Answer

When the price of OLED televisions falls due to positive technological change, it makes these televisions more affordable, leading to an increase in their demand. Since OLED televisions and Blu-ray players are complementary goods, the increased demand for OLED televisions will also increase the demand for Blu-ray players. As demand for Blu-ray players increases, the equilibrium price of Blu-ray players will also increase due to higher demand.

Positive Technological Change in the Production of OLED Televisions Caused