EC.1 Digital camera has gained popularity in recent years over traditional cameras that rely on old-fashioned 33MM film. What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film? (Total 9 Points)
Hints: (1) In your answer, first, sketch the Supply and Demand graphs at initial equilibrium for the two markets, one for Traditional Camera film, and another for digital cameras.
(2) Next, determine which curves (Supply, Demand or both) of the two markets may be changed as a result of the events described in the opening scenario and in which direction and indicate this on your graph.
(3) Finally, Determine the outcome on equilibrium price and quantity of traditional Camera film. Keep in mind that if we are discussing changes to both supply and demand curves simultaneously, one of the equilibrium variables will be ambiguous. Describe your answer to part 3 in words as well as in your graph.