What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

Question

Quizplus · Accepted Answer

The increase in the price of traditional cameras will decrease the demand for traditional film, resulting in a decrease in equilibrium price. The decrease in demand may or may not result in a decrease in quantity, depending on the magnitude of the effect of the other factors. Cheaper digital cameras will also decrease the demand for traditional film. The fall in the cost of resources needed to manufacture traditional film and more firms entering the market will increase the supply, which could either increase or decrease the quantity depending on the magnitude of the effects. Thus, the effect on quantity is ambiguous.

What Will Happen to the Equilibrium Price and Quantity of Traditional