"The price of digital cameras fell because of improvements in production technology.As a result, the demand for film cameras decreased.This caused the price of film cameras to fall; as the price of film cameras fell, the demand for film cameras decreased even further." Evaluate this statement.
A)The statement is false because the demand for film cameras would increase as the price of digital cameras fell.
B)The statement is false.A decrease in the price of digital cameras would decrease the demand for film cameras, but a decrease in the price of film cameras would not cause the demand for film cameras to decrease.
C)The statement is false because it confuses the law of demand with the law of supply.
D)The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.

Question

Quizplus · Accepted Answer

While the decrease in the price of digital cameras would lead to a decrease in the demand for film cameras, the statement does not make logical sense in stating that the decrease in the price of film cameras would cause the demand for them to decrease even further. A decrease in price would typically lead to an increase in demand, not a further decrease.

"The Price of Digital Cameras Fell Because of Improvements in Production