How would a decrease in the cost of production affect the market for video games?
A) Supply would decrease, leading to an increase in price and a reduction in quantity sold.
B) Supply would decrease, leading to a reduction in price and a reduction in quantity sold.
C) Supply would increase, leading to an increase in price and an increase in quantity sold.
D) Supply would increase, leading to a reduction in price and an increase in quantity sold.

Question

Quizplus · Accepted Answer

A decrease in the cost of production typically increases supply, as producers can produce more at a lower cost. This increase in supply generally leads to a reduction in price and an increase in the quantity sold.

How Would a Decrease in the Cost of Production Affect