ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A
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B
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C
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D
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Detailed explanation-1: -Answer and Explanation: The price of computer chips used in the manufacture of personal computers has fallen. This will lead to an increase in supply for personal computers. Computer chips are the input of the personal computer. When the price of the input fall, the cost will decrease.
Detailed explanation-2: -a. If the price of computer chips falls, the cost of producing computers declines. As a result, the supply of computers shifts to the right, as shown in Figure 22. The new equilibrium price is lower and the new equilibrium quantity of computers is higher.
Detailed explanation-3: -The demand for computer software will decrease. Computer software is a complement of computers. So if computers go up in price, then the demand for its complement will decrease. an increase the equilibrium price and decrease the equilibrium quantity.
Detailed explanation-4: -The demand curve shifts out (to the right). Over the past 30 years, technological advances have reduced the cost of computer chips. How has this affected the market for typewriters? Computers and typewriters are substitutes, and lower computer prices results in consumers substituting away from typewriters to computers.