Suppose that the market for DVD rentals is perfectly competitive and operates at the industry's long-run...

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Economics

Suppose that the market for DVD rentals is perfectly competitiveand operates at the industry's long-run equilibrium. At this point,Amazon and Hulu expand their online streaming services. Describethe long-run adjustment observed in the DVD rental industry, stepby step. Explain the economic intuition for each change youdescribe and illustrate it with a graph.

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When Amazon Hulu expands their offerings demand for DVDrental decreases so its market demand curve shifts leftwarddecreasing market price and market quantity of DVD rental Firmsbeing price takers in new short run equilibrium firms incureconomic lossIn long run economic loss causes some See Answer

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