8. Imagine the market for home computers in the 1990s. a. Start in Equilibrium (be sure to label all relevant points) b. Change at least one of the ceteris paribus conditions. As the internet begins to provide entertainment and commerce options in a graphical format that everyone can understand, improvements in processor technology also arrive. c. Examine the changed incentive. Which curve(s) has(have) changed? Why? (i.e. – which of the ceteris paribus conditions have changed?) _______________________________________________________ d. Identify the change(s) in direction, and draw into the above market. e. Finish in equilibrium. What are the effects on price and quantity?
8. Imagine the market for home computers in the 1990s. a. Start in Equilibrium (be sure to label all relevant points) b. Change at least one of the ceteris paribus conditions. As the internet begins to provide entertainment and commerce options in a graphical format that everyone can understand, improvements in processor technology also arrive. c. Examine the changed incentive. Which curve(s) has(have) changed? Why? (i.e. – which of the ceteris paribus conditions have changed?) _______________________________________________________ d. Identify the change(s) in direction, and draw into the above market. e. Finish in equilibrium. What are the effects on price and quantity?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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8. Imagine the market for home computers in the 1990s.
a. Start in Equilibrium (be sure to label all relevant points)
b. Change at least one of the ceteris paribus conditions. As the internet begins to provide entertainment and commerce options in a graphical format that everyone can understand, improvements in processor technology also arrive.
c. Examine the changed incentive. Which curve(s) has(have) changed? Why? (i.e. – which of the ceteris paribus conditions have changed?) _______________________________________________________
d. Identify the change(s) in direction, and draw into the above market.
e. Finish in equilibrium. What are the effects on price and quantity?
Expert Solution
Step 1
The total number of buyers and sellers in a certain area or region is referred to as a market. The region could be the entire world, or it could be made up of continents, regions, states, or cities. The value, cost, and price of goods traded are influenced by factors in the supply and demand markets. The market could be either physical or digital. It could be small or large, perfect or imperfect.
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