An increase in the supply of music downloads indicates that more music downloads will be:

An increase in the supply of music downloads indicates that more music downloads will be:

A) supplied, even if the prices of music downloads stayed the same.

B) demanded, because sellers are putting music downloads on sale.

C) supplied because music download prices have decreased.

D) demanded, because sellers are selling more music downloads.

Answer: A) supplied, even if the prices of music downloads stayed the same.

Inefficient supply carries the idea that at every price level, sellers are prepared and capable of providing customers with a larger amount of the product. In this context, the download providers could be cheaper because of advances in technology, improved subscription base or decreased royalty rates. Consequently, they can generate greater revenue for the same variety of music downloads as the price changes are not possible. This represents a shift in the supply curve to the right and can be understood to be exogenous to demand or price factors. This appears to be a supply-side development, indicating that more providers for any reason feel empowered or willing to supply more downloads than before, rather than the other way round due to higher demand or lower prices.