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' preferences change in favor of digital cameras, it will cause a decrease in demand for film cameras. As a result, the equilibrium price and quantity of film cameras will both fall. Technological advances in film camera production (B) will lead to a decrease in the cost of production, causing the supply curve to shift to the right and the equilibrium price to decrease, but the quantity will increase. A pay raise for workers (C) who make cameras will lead to an increase in the cost of production, causing the supply curve to shift to the left and the equilibrium price to increase, but the quantity will decrease. The price of digital cameras increasing (D) will not directly affect the equilibrium price and quantity of film cameras.

Suppose We Observe That Both the Equilibrium Price of Film