Suppose a technological advance reduces the cost of making computers. (a) Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and pro- ducer surplus in the market for computers. (b) Computers and adding machines are substitutes Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for adding machines. Should adding machine producers be happy or sad about the technological advance in computers? (c) Computers and software are complements. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the mar- ket for software. Should software producers be happy or sad about the technological advance in computers? (d) Does this analysis help explain why software producer Bill Gates is one of the workd's richest men?
5. Suppose a technological advance reduces the cost of making computers.
(a) Use a
(b) Computers and adding machines are substitutes Use a supply-and-demand diagram to show what happens to price, quantity,
(c) Computers and software are complements. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the mar- ket for software. Should software producers be happy or sad about the technological advance in computers?
(d) Does this analysis help explain why software producer Bill Gates is one of the workd's richest men?
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