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Assuming Compact Discs and Cassettes Are Substitute Goods, a Decrease

Question 135

Multiple Choice

Assuming compact discs and cassettes are substitute goods, a decrease in the price of cassettes will cause the demand curve for compact discs to:


A) shift to the left as consumers switch from buying discs to cassettes.
B) shift to the right as consumers switch from buying discs to cassettes.
C) shift to the left as producers increase cassette production and reduce disc production.
D) remain unchanged since discs and cassettes are sold in separate markets.

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