Benefits most from falling production costs-consumers


The cost of producing flat-screen TVs has fallen over the past several decades. Using the supply and demand model, explain the effect of the falling production costs on the price and quantity of flat screen TVs sold. Explain what happens to consumer and producer surplus as a result of the shift in supply. Suppose the supply of flat-screen TVs is very elastic, who benefits the most from falling production costs - consumers or producers of these TVs? Explain.

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Microeconomics: Benefits most from falling production costs-consumers
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