BPI going to start suing UK music downloaders.Watch
The competition is substantial enough to force firms to monitor and adjust the price level of the goods they sell, dependant on the current consumer demand.
I wouldn't say the music industry is common ground for perfect competition, hence the model isn't to perfection for the given market either. However, it does illustrate the basic dilemma that firms do face.
with music: its difficult to analyse because its difficult to say whether mp3 and cds are subsititutes, and this leads to different interpretations of elasticities of demands. i think that for most people (not for me though) cds and mp3s are substitutes And do you think that mp3 from p2p programs is classified as a 'good' when there isnt really a seller, and it is really a free good for the consumer. You sending your mate music for free doesnt have a seller and a buyer does it
i downloaded about 3 of bond's songs and then got the album for christmas.
i bought the K-PAX film album after having downloaded about 3 songs.
so, it was a positive effect on the market, as i might not have been sure about buying the albums and might not have bought them if i didn't downloaded the songe beforehand.
i like the little booklets you get in albums, good booklets, not crap ones that just thank everyone and thats it.
also, they have been producing really shiet music lately, so its not our fault that we don't want to buy unbelievable bullcrap, masquerading as music.
you dont need perfect competition for supply and demand to work
BTW: Whether it is a good/service is pretty much irrelevant - Obviously downloaded MPs's off the internet is the use of a service. It isn't tangible. Although this isn't important in regards to the bearing this has on points constructed in the last few pages.