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Brewster Industries (BI) makes turn signals for automobiles. BI's brilliant founder, Dr. Ava P. Brewster, has recently discovered a way to lower BI's materials cost by 45% through the use of nanotechnology. What will this breakthrough do to the quantity of turn signals supplied and the price of turn signals? Be sure to stipulate if this is represented by a shift of the supply curve (change in supply determinant) or a movement along the supply curve (change in quantity supplied). How will this change impact the quantity of turn signals demanded, if at all? Be sure to stipulate if this is represented by a shift of the demand curve (change in demand determinant) or a movement along the demand curve(change in quantity demanded). BI's longtime competitor, Rosebud Enterprises, has been unable to match BI's technological breakthrough and is evaluating its best response to the change in the market. In addition to the new supply and demand curves and BI's new price for its turn signal, name two other pieces of information Rosebud needs to make a sound evaluation. If, after its evaluation of the market, Rosebud concludes that it has fallen too far behind BI technologically to compete and therefore decides to withdraw entirely from the turn signal market, what will happen to the quantity of turn signals supplied and the price of turn signals? Be sure to stipulate if this is represented by a shift of the supply curve or a movement along the supply curve.
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