76.6k views
5 votes
Suppose that video game discs are a normal good. If the incomeof video game players increase, you predict that in the market forvideo games,

a) both equilibrium price and quantity will fall
b) equilibrium price will fall but quantity willincrease
c) equilibrium price will increase and quantity willdecrease
d) both equilibrium price and quantity will increase

User Idmitme
by
4.0k points

2 Answers

3 votes

Final answer:

If the income of video game players increases, d) both the equilibrium price and quantity in the market for video games will increase.

Step-by-step explanation:

Equilibrium price and quantity refer to the point in a market where the demand for a good or service equals its supply, establishing a balance between buyers and sellers. At this equilibrium, the market-clearing price and quantity are determined, ensuring that all units offered by producers are bought by consumers. Changes in demand or supply can shift the equilibrium, leading to adjustments in price and quantity.

In the market for video games, if the income of video game players increases, it will result in an increase in demand for video games. This can be seen as a shift in the demand curve to the right. As a result, both the equilibrium price and quantity will increase.

User Barbora
by
3.4k points
3 votes

Answer:

Option (D) is correct.

Step-by-step explanation:

It was given that video game is a normal good. We know that there is a positive relationship between the demand for a normal good and income of the consumer, hence, if there is an increase in the income level of the consumer then as a result the demand for a normal good increases which shifts the demand curve for normal good rightwards.

Therefore, this will lead to increase both equilibrium price and equilibrium quantity in the market for video games.

User DoctorRuss
by
3.6k points