Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. Illustrate each, and show what would happen to the equilibrium quantity and the market price . a) The price of touch screens used in smartphones declines. b) The price of machinery used to produce smartphones increases. c) The number of manufacturers of smartphones increases. d) There is a decrease in the market demand for smartphones. Content information: Supply refers to the quantities of goods sold in the market at a given set of prices. Supply is positively related to price. As price increases, quantity supplied will increase and vice versa. A change in supply leads to shift in the supply curve. Quantity supplied refers to the amount of good sold in the market at a fixed price at a given point in time. Change in quantity supplied leads to a movement along the given supply curve.

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Chapter 3, Problem 11P

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Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. Illustrate each, and show what would happen to the equilibrium quantity and the market price.

a) The price of touch screens used in smartphones declines.

b) The price of machinery used to produce smartphones increases.

c) The number of manufacturers of smartphones increases.

d) There is a decrease in the market demand for smartphones.

Content information:

Supply refers to the quantities of goods sold in the market at a given set of prices. Supply is positively related to price. As price increases, quantity supplied will increase and vice versa. A change in supply leads to shift in the supply curve.

Quantity supplied refers to the amount of good sold in the market at a fixed price at a given point in time. Change in quantity supplied leads to a movement along the given supply curve.

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