Final answer:
The iPod's arrival shifted consumer preferences, decreasing demand for the Sony Walkman and leading to a lower equilibrium price and quantity. This process illustrates the broader impact of technological advances and new products on existing markets and consumer behaviors.
Step-by-step explanation:
The introduction of the iPod and other digital music players significantly disrupted the market for traditional portable audio devices such as the Sony Walkman. To analyze this impact, we can use a four-step process:
- Determine the Change in Market Conditions: The iPod, with its advanced features and storage capabilities, became a substitute for the Walkman, shifting consumer preferences away from cassette players.
- Determine the Impact on Demand or Supply Curve: The demand for Walkmans likely decreased as consumers preferred the new technology, causing a leftward shift in the demand curve.
- Analyze the New Equilibrium: As the demand for Walkmans decreased, the equilibrium price would also fall, leading to a lower equilibrium quantity sold.
- Compare to the Original Equilibrium: The new equilibrium reflects a decreased price and quantity for Walkmans in comparison to the market conditions before the iPod's introduction.
This shift indicates how technological advancement and the introduction of innovative products can disrupt existing markets and alter consumer preferences and behavior. In the face of such technological changes and market pressures, it may lead companies like Sony to reassess their product offerings, potentially discontinuing older products like the Walkman, due to reduced demand and profitability.