Consider a local market for Blu-ray disc movie rentals, which is perfectly competitive. The market supply curve slopes upward, the market demand curve slopes downward, and the equilibrium rental price equals $3.50. Consider each of the following events, and discuss the effects they will have on the market clearing price and on the demand curve faced by the individual rental store.
a. People's tastes change in favor of going to see more movies at cinemas with their friends and family members.
b. National Blu-ray disc rental chains open a number of new stores in this market.
c. There is a significant increase in the price of downloading movies on the Internet.