Comment on Correction: UConn-Secret Money Story by Ishaq.
The newspaper industry is suffering massive reduction in sales. Some analysts claim that newspaper companies are being hit by the fact that modern computer technology and online media have reduced the cost of copying articles to nearly zero.
A) Use the ideas of demand side substitution and the analysis of supply and demand to explain why this claim is correct. You may use graphs and explain the changes.
b) Now, assume that a majority of traditional newspapers and magazines adopt the new technology (internet) and shift to online media (including the recent shift by Newsweek), how does this shift affect the level of employment (staff and writers) and wages in these sectors?
c) If this shift represents more competition in the media market, which is the case in the media industry, how does this shift affect the subscription prices for customers?
d) how does this shift affect consumer and producer surplus?