At a price of $1.60 there is a
in the market. The quantity
is more than the quantity
.
Consumers will
the price
. As the price increases the quantity supplied
from
to 30 000 songs because the producer will make more
. The quantity
will
from 40 000 to
songs because consumers are unwilling or cannot
to buy as many songs at the higher price.
The market will return to an equilibrium price of
and equilibrium quantity of
.