Smart phones are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of smart phones
What will be an ideal response?
Advances in technology increase the supply of smart phones and the supply curve of smart phones shifts rightward. The demand curve does not shift. Rather, on the demand side there is an increase in quantity demanded, or movement along the curve, in response to the falling price. The equilibrium price of a smart phone falls and the equilibrium quantity of smart phones increases.
You might also like to view...
Perfectly competitive markets have absolutely no drawbacks.
Answer the following statement true (T) or false (F)
Which of the following is not a characteristic of capitalism?
a. Private ownership of the factors of production. b. Businesses make their own product and price decisions. c. Public ownership of the factors of production. d. Decentralized decision-making using markets.
Which is NOT part of the definition of capital, as used by economists? It ___.
A. must be manufactured B. is used by firms C. is used up in production D. produces other goods and services
If the real deficit is $100 billion, the inflation rate is 7.5 percent, and the nominal deficit is $400 billion, then total debt is:
A. $1 trillion. B. $2 trillion. C. $3 trillion. D. $4 trillion.