Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?
A)The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
B)The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase.
C)The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players.
D)The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

Question

Quizplus · Accepted Answer

When the price of LCD televisions falls due to positive technological change, more consumers are likely to buy them. Since Blu-ray players are complements to LCD televisions, the demand for Blu-ray players will increase, leading to an increase in their equilibrium price.

Positive Technological Change in the Production of LCD Televisions Caused