Reference no: EM133083097

1. identify the determinant of demand or supply that has changed (something like the # of firms has decreased).

Show on the graph how the given situation affects the market for the specific good by shifting either supply, demand or both.

Label the new equilibrium price and quantity on the graph as P ∗2 & Q∗2 and list how both the equilibrium price and quantity change (increase/decrease, etc.) as the result of this change in the space provided.

f you do not think there is a shift, then determine what has changed and how this impacts the market.

a. The biggest decline came from rentals of DVD and Blu-ray discs, which were down 18% to $2.47 billion, due to a dramatic decline in kiosk rentals, such as Redbox, and continued weakness in the near-extinct retail rental business.

Sales of DVDs and Blu-rays dropped 10% to $5.5 billion, an improvement over 2015's 12% drop. Perhaps most worrisome for studios, though, is that digital sales of movies from outlets like iTunes, Amazon, and cable companies totaled just over $2 billion in 2016, up only 5% from 2015. In 2015, the category grew a dramatic 19% and fueled optimism that online film sales could help make up years-long declines in DVD sales.

With no major new companies entering the space last year or digital viewing devices launching, and the continued shift in consumer interest toward television shows and subscription streaming services, though, that business appears to be challenged too.

How does this change affect the market for DVD's?

What determinant of demand or supply changed?

What is the equilibrium price and equilibrium quantity?