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Posted by on Friday, January 21, 2011 at 1:52am.

The relative price of personal computers has dropped drastically over time. would you explain this falling price in terms of demand or supply changes? what factors (at least 4) are likely to have caused the demand or supply shifts that did occur?

  • ECONOMICS - , Friday, January 21, 2011 at 8:00am

    Demand for computers has not gone down, if you include internet-enabled smart phones and tablets as "computers". The market for desktops and laptops is levelling off, particularly in developed counties.

    Economies of scale, increased competition and lower component costs have induced a favorable supply curve for consumers. A longer useful life of computers may also have contributed to a reduced turnover.

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