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May 01, 2023

Answers:

Answer To Question 1:

Requirement A)

TV screens and DVDs are the complementary goods because DVD’s can also be used for the TV screens.

DVD and movie tickets are the substitute goods as they can be used in place of one another. For instance, if a person fails to buy the movie tickets, he or she can use DVD to watch a movie and vice versa.

TV screens and movie ticket can be considered to be substitute because movie can be watched either on TV screen or by buying a ticket to watch in theatre.

Requirement B)

A reduction in the cost of manufacturing TV screens due to the technological advancement would induce the supplier or sellers to produce more TV screens as manufacturing cost reduces. This in turn would cause an increase in the supply of TV screens and thereby pushing an upward pressure on the supply which shifts the supply curve of TV screens towards the rightward direction (Banerjee 2021). The market of TV screen can be shown graphically.

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