You publish a magazine for calculator collectors. to produce and distribute this magazine, you use a number of inputs: • computers • labor • paper • postage • staplers if the price of computers goes down and there are no other changes, what is the consequence?

D

Options included in the questions are:

“A. The demand for the magazine shifts to the left, and the supply curve shifts to the right. The equilibrium price falls, with an unknown change in the equilibrium quantity.

B. The demand for the magazine does not change,  supply curve shifts to the left. The equilibrium price rises, while the equilibrium quantity falls. 

C. The demand for the magazine shifts to the right, and the supply curve shifts to the left. The equilibrium price rises, with an unknown change in the equilibrium quantity. 

D. The demand for the magazine does not change, and the supply curve shifts to the right. The equilibrium price falls, but the equilibrium quantity rises.”

The answer is D.

The demand for the magazine does not change even if the price of the computers goes down. It is the equilibrium price that will fall due to decrease on the price of inputs resulting to increase in quantity of a magazine produced.

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