Answer to Question #78000 in Microeconomics for gurpreet

Question

During 2013, the demand for LCD TVs appeared to be falling. At the same time, some industry observers expected that several smaller TV manufacturers might exit the market. Use a demand and supply diagram to analyze the effects of these factors on the equilibrium price and quantity of LCD TVs. Clearly show on your diagram the old equilibrium price and quantity and the new equilibrium price and quantity. Can you tell for certain whether the new equilibrium price will be higher or lower than the old equilibrium price? Briefly explain.

Answer 1

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