Walkmans play CDs. Producers of Walkmans expect that a new technology for producing MP3 players will be available next year. Walkman Watch asks you to predict the effect of the new technology on the market for Walkmans. You predict that

Question

Quizplus · Accepted Answer

The new technology is expected to produce MP3 players which are a substitute for Walkmans. This will lead to a decrease in the demand for Walkmans as consumers will switch to the new technology. This will shift the demand curve for Walkmans to the left, resulting in a decrease in the price of a Walkman.

Walkmans Play CDs