An increase in demand for Blu-ray disc players occurs. Which of the following statements is TRUE for individual firms that produce Blu-ray disc players?

Question

Quizplus · Accepted Answer

An increase in demand for Blu-ray disc players will lead to an increase in the price of the players, since demand is greater than supply. This will result in an increase in the revenue of the producing firms. With higher revenues, the firms would be willing to increase their production, leading to an increase in demand for labor. Therefore, the price of Blu-ray disc players will increase leading to an increase in the demand for labor by the firm.

An Increase in Demand for Blu-Ray Disc Players Occurs