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Between 2004 and 2012, more Americans shifted from reading print newspapers to getting news from digital sources, a change in tastes. This shifted the demand curve for print news to the left, while the supply of print newspapers stayed the same. What happened to the equilibrium price and quantity of print news?
ABoth equilibrium price and quantity rose
BEquilibrium price rose while quantity fell
CEquilibrium price fell while quantity rose
DBoth equilibrium price and quantity fell
Answer & Solution
Correct answer: D. Both equilibrium price and quantity fell
1. A shift in tastes away from print news is a demand-side event.
2. Fewer readers wanting print news at every price shifts the demand curve for print news to the left.
3. A leftward demand shift moves the new equilibrium down along the unchanged supply curve.
4. Both equilibrium price and equilibrium quantity fall together.
5. Options A and B get at least one direction wrong.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.3 | Changes in Equilibrium Price and Quantity: The Four-Step Process_
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