When music downloading was introduced, what impact did that have on the demand curve for CDs? Explain.
When music downloading was introduced, what impact did that have on the demand curve for CDs? Explain.
Simply, due to the introduction of the downloading music, the demand for the CDs decreases as downloading of music is cheaper, faster and easier than buying the CDs. As due to the change in the determinants of the demand like tastes, income, other goods, expectations, and the number of buyers, there is change/ movement in demand curve. Since in this case as the downloading of music increases the demand curve for the CDs gradually shifts downward. So, due to more preference of the customers for downloading music the demand for CDs decreases, by which the demand curves shifts downward. Hence it shows the inverse relation between music downloading and CDs because proportion change (increase) in downloading music results in a proportion decrease in CDs.