Question

Harvey Rabbitt pays for monthly cable TV service. Last week, the cable company informed Harvey that his monthly cable price would go down because the city council has granted approval for three new cable companies to service his area. How is the market for cable TV services affected by this?

Answer 1

There is an increase in the supply of cable TV service.

Step-by-step explanation:

The reason is that the companies will now try to capture the market and make at least breakeven sales by giving excessive sales discouts offers. This move in the market due to increase in the number of the suppliers and bargaining power of customers will decrease the cost of the product and this decrease in prices would increase the demand of the product which will increase the supply of the cables.