Assume that VCRs and videotapes are complements. When the price of VCRs fall and the price of plastic (used to make videotapes) rise, what should happen to price and quantity of videotapes. What happens to equilibrium price and quantity

Explanation:

When the price of VCRs fall and the price of plastic (used to make videotapes) rise, then there will be an increase in the price and decrease in demand and for videotapes since they are strong compliments.

Consider this analogy, people used to need videotapes in other to record on VCRs; (just a sim card is needed so as to fully use a phone). Hence, as the price of the material (plastic) used to make videotapes rises; ultimately the videotape prices themselves would increase; leading to lesser demand.

As a result of this, we can expect the equilibrium price and quantity to decrease.

answerproduct line length; product mix width;

answernet income for 2017 will be greater if the inventory quantity declines;