Final answer:
In the competitive video game industry, reducing production costs or increasing marketing can help achieve desired sales volumes. Technological advancements that lower production costs can lower prices, increase demand, and strengthen the competitive position of firms. In a decreasing cost industry, such advancements benefit the entire market by reducing prices and increasing efficiency.
Step-by-step explanation:
In a competitive sector like the video game industry, to attain the desired sales volume, companies might consider options such as lowering production costs or increasing marketing expenses. It is unwise to decrease product quality or ignore customer feedback as these actions could harm the company's reputation and sales in the long term. If new technology in a perfectly competitive market leads to a substantial reduction in production costs, firms can pass on these savings to consumers through lower prices. This could result in increased demand for their products, allowing companies to potentially capture a larger market share. Moreover, firms could reinvest the savings into other areas like marketing, innovation or improving product quality, which can further strengthen their competitive position. For a decreasing cost industry, incorporating improved technology or increasing the education of employees leads to falling average total costs. This benefits the entire industry, including high-tech sectors, by enabling the market to expand, thus intersecting the zero-profit equilibrium at a lower price level, further driving competition and efficiency within the market.