If sellers of music downloads negotiate a reduction in the royalties they must pay for each song they sell and the price of music CDs falls, what is the effect on the equilibrium price of music downloads? A. Equilibrium price falls. B. Equilibrium price may rise or fall. C. Equilibrium price rises.
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An increase in the supply of music downloads indicates that more music downloads will be A) supplied, even if the prices of music downloads stayed the same. B) demanded, because sellers are putting music downloads on sale. C) supplied because music download prices have decreased. D) demanded, because sellers are selling more music downloads.
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(1) Draw a demand curve for music downloads. What happens to it in each of the following scenarios? Why? (a) The price of music downloads falls (b) The price of CDs falls (c) The price of iPods falls (d) Income increases (e) # of people downloading music increases (f) Buyers prefer buying iPods to CD players (g) Music downloads are expected to become less expensive in the future (h) You expect to receive a huge bonus next year
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Q4: Draw a demand curve for music downloads. What happens to it in each of the following scenarios? Why? A) The price of iPods falls. B) The price of music downloads falls. C) The price of music CDs falls.
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