As demand for MP3 music downloads increases, other things being equal, we can expect
A)a decrease in both the relative price and quantity of MP3 music downloads.
B)a decrease in the supply of MP3 music downloads.
C)more MP3 music downloads to be produced.
D)an excess number of MP3 music downloads in the market.

Question

Quizplus · Accepted Answer

With increased demand for MP3 music downloads, we can expect more producers to enter the market and produce more downloads to satisfy the demand. This will lead to an increase in both the quantity and supply of MP3 music downloads. The relative price of the downloads may remain the same or even increase depending on the level of competition in the market. However, an excess number of downloads (D) is unlikely to occur as producers will adjust their output to match the demand. A decrease in both the relative price and quantity of downloads (A) is not expected unless there is a decrease in demand or an increase in production costs.

As Demand for MP3 Music Downloads Increases, Other Things Being