Final answer:
The introduction of the iPod led to a decrease in demand for the Sony Walkman, resulting in a new market equilibrium with a lower price and quantity for Walkmans due to consumer preference shifts towards advanced portable digital music players.
Step-by-step explanation:
Analyzing the Impact of iPod on Sony Walkman's Market
To understand the impact of the advent of the iPod on the equilibrium price and quantity of the Sony Walkman, we can use the four-step process which involves identifying shifts in demand and supply, analyzing the direction of the shift, determining the new equilibrium, and comparing the new equilibrium with the original one.
- Identify the changes in the market: With the introduction of the iPod, the market experienced a technological advancement in portable digital music players.
- Analyze demand and supply shifts: The demand for the outdated technology of portable audio cassette players like the Sony Walkman decreased while the supply remained the same initially.
- Determine the new equilibrium: Due to the decreased demand for Walkmans, the new equilibrium would show a lower quantity being sold at a lower price.
- Compare the new equilibrium to the original one: The original higher demand and price for Walkman would be replaced by a lower demand and price equilibrium point after the iPod's introduction.
This process shows a clear shift in consumer preferences towards newer, more advanced technology like the iPod, which typically comes with more features, such as increased storage capacity for songs.