Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen. Which of the following could be responsible for this?

Question

Quizplus · Accepted Answer

If consumers switch their preferences to digital cameras, the demand for film cameras will decrease, leading to a decrease in both the equilibrium price and quantity of film cameras. None of the other options would directly affect the equilibrium price and quantity of film cameras. A pay raise for workers (option A) would increase the cost of production, potentially leading to a higher equilibrium price. Technological advances (option B) would decrease the cost of production, potentially leading to a lower equilibrium price, but it does not explain the decrease in quantity. An increase in the price of digital cameras (option D) may affect demand for film cameras, but it would not directly affect the equilibrium price and quantity of film cameras.

Suppose We Observe That Both the Equilibrium Price of Film