If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will __________and the equilibrium quantity will __________.

Question

Quizplus · Accepted Answer

When the cost of computer chips is lowered, the supply of computers will increase, shifting the supply curve to the right. This will result in a lower equilibrium price and a higher equilibrium quantity, as the increase in supply will lead to a decrease in price and an increase in quantity demanded. Therefore, the correct answer is choice D, where the equilibrium price will fall and the equilibrium quantity will increase.

If Technological Advances Lower the Cost of Computer Chips, in the Market