Question

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

Answer 1

From the scenario given above, the equilibrium price of the traditional camera film will fall, and the effect on the equilibrium quantity is ambiguous. The price will fall because more firms are manufacturing the traditional film, which means the quantity of that film in the market will be much, forcing the price to come down. The effect on the equilibrium quantity will vary.