Assume the market for dvd movies is initially at equilibrium. a decrease in the price of streamed movies, a substitute for dvd movies, will the equilibrium price and the equilibrium quantity of dvd movies. a) increase; increase b) increase; decrease c) decrease; increase d) decrease; decrease

D.

Explanation:

A decrease in the price of streamed movies will make them more attractive for consumers. Some DVD movies consumers will now shift to streamed movies. This will lead to a decrease in the demand for DVD movies. In the demand and supply graph the demand curve will shift to the left. If supply remains constant the equilibrium quantity and price will decrease. The figure attached shows the situation.

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