Figure: Four Markets for DVDs (Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs.If D1 or S1 is the original curve and D2 or S2 is the new curve, which of the graphs shows what may happen if some of the stores that rent DVDs close?

Question

Figure: Four Markets for DVDs   (Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs.If D1 or S1 is the original curve and D2 or S2 is the new curve, which of the graphs shows what may happen if some of the stores that rent DVDs close?

Quizplus · Accepted Answer

If some of the stores that rent DVDs close, then the demand for DVDs will decrease (shift leftward), resulting in a decrease in price and quantity. This is represented by the leftward shift of D1 to D2 in graph B. Graphs A, C, and D show changes in supply, which are not relevant in this scenario.