Beats produces many models of headphones in its product line. If profits on the Wireless Headphone model increase, would this be reflected as a change in demand or a change in supply in the market for the Studio Headphones model, ceteris paribus? Explain. Be sure to clearly identify a textbook variable or determinant that is causing this change. Would this change be an increase or decrease? Explain. Would this change result in a surplus or in a shortage in the market for Studio Headphones? Explain. Given this surplus or shortage, how will a new equilibrium be established? What do you predict will happen to the equilibrium price and the equilibrium quantity exchanged in the market for Studio Headphones? Explain.
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