Question

the graph illustrates the market for streaming subscriptions. suppose the current price of a streaming subscription is $90 and 1 million streaming subscriptions a year are bought. what do you predict will happen to the price of a streaming subscription? a. the shortage of streaming subscriptions forces the price up. b. it is impossible to say what will happen to the price of a streaming subscription. c. the price will not change because neither a shortage nor a surplus occurs. d. the surplus of streaming subscriptions forces the price down.

Explanation:

In a market, if the current price - quantity combination is not at equilibrium, surpluses or shortages affect price. Without seeing the graph, we assume basic market principles. If there is a surplus (quantity supplied > quantity demanded), producers will lower prices to sell more. If there is a shortage (quantity demanded > quantity supplied), prices will rise. Since no information about equilibrium is given, we can't be sure. But generally, if the market is not in equilibrium, price adjusts based on surplus or shortage.

Answer:

B. It is impossible to say what will happen to the price of a streaming subscription.