91Ó°ÊÓ

As illustrated in the below graph, $X$-axis denotes the price of the Sony Walkman and $Y$-axis denotes the quantity of Sony Walkman. $E_0$is an initial equilibrium where demand curve $D_0$and supply curve $S_0$cross individually other at price $P_0$and quantity $Q_0$.

Both the occasions move the demand curve leftward. Since the i-pod is a replacement for a Sony Walkman and people's choices are changing more towards i-pod and decrease in the taxation make i-pod cheaper, so demand for Sony Walkman drop. Therefore the equilibrium price and quantity will also reduce

As displayed in the above graph, the demand curve of Sony Walkman moves leftward from $D_0$to $D_1$. As, a result, the equilibrium price of Sony Walkman lowers from $P_0$to $P_1$and equilibrium quantity also falls from $Q_0$to $Q_1$. Also, the new equilibrium point will be $E_1$.