Exhibit 4-5 Supply and demand curves for computers
Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?

Question

Exhibit 4-5 Supply and demand curves for computers 
Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?

Quizplus · Accepted Answer

Lower costs for computer chips and motherboards would shift the supply curve to the right, leading to an increase in quantity supplied and a decrease in price. This would result in a new equilibrium point at a lower price and a higher quantity of computers sold, as shown in Exhibit 4-5. The failure of several computer manufacturers (B) would likely shift the supply curve to the left, leading to a decrease in quantity supplied and an increase in price, which is the opposite of what is shown in the exhibit. Higher prices for computer software (C) would likely reduce demand, shifting the demand curve to the left and resulting in a new equilibrium point at a lower quantity and higher price. More features and greater ease of use (D) could increase demand and shift the demand curve to the right, potentially leading to a higher price and quantity sold, but this is not reflected in the exhibit.

Exhibit 4-5 Supply and Demand Curves for Computers