Refer to Scenario 3.1 below to answer the questions that follow.
SCENARIO 3.1: Rented DVDs and movies shown in theaters are substitutes. Rented DVDs and plasma TVs are complements. Plasma TVs and movies shown in theaters are normal goods. People watch rented DVDs more often in the winter than in the summer.
-Related to the Economics in Practice on page 50: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of electronic textbooks for the Kindle decreases,

Question

Quizplus · Accepted Answer

If the price of electronic textbooks for the Kindle decreases, it becomes cheaper for consumers to purchase electronic textbooks for the Kindle. This increases the demand for the Kindle as more consumers may now find it more affordable and convenient to purchase the device in order to access cheaper electronic textbooks. This increase in demand for the Kindle then leads to an increase in the quantity demanded of electronic textbooks for the Kindle. As electronic textbooks and traditional hard-copy textbooks are substitute products, the increase in demand for electronic textbooks leads to a decrease in demand for traditional, hard-copy textbooks. Therefore, demand for the Kindle increases, the quantity of electronic textbooks demanded increases, and demand for traditional, hard-copy textbooks decreases.