There is a large increase in the popularity of video games and there are many mo

Question

There is a large increase in the popularity of video games and there are many more video game companies which are making video games also, then based on Supply and Demand graph for Video games, following statement is true: A. The New Equilibrium Price of video games will increase. B. Total Sales (Quantity) of the video games will be uncertain. C. Sales (quantity) of video games will decrease. D. There is no exact answer for price and quantity of video games, since we do not know the size of the shifts in Supply and Demand. E. The Equilibrium price of video games will be uncertain, indeterminate.

Explanation / Answer

As the demand for the video games have increased it will shift the demand curve for the video game to the right i.e. at a higher price and higher quantity. But, as the supply has also increased it will shift the supply curve to the right i.e. lower price and higher quantity.

taking both the conditions into account the quantity will rise but the price will be uncertain. The answer is "E", The equilibrium price of the video games will be uncertain, indeterminate. (quantity will increase)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.