Software programs have been introduced that allow you to use your personal computer like a telephone to talk to others who own the same software. One such program costs $50 to buy and allows you to make unlimited calls for free. The economics of substitutions and complements are present in this scenario.
a. Explain in economic terms the effect of these products on the market for long distance telephone service.
b. Explain in economic terms the effect of these products on the market for personal computers.

Question

Software programs have been introduced that allow you to use your personal computer like a telephone to talk to others who own the same software. One such program costs $50 to buy and allows you to make unlimited calls for free. The economics of substitutions and complements are present in this scenario.
 a. Explain in economic terms the effect of these products on the market for long distance telephone service.
 b. Explain in economic terms the effect of these products on the market for personal computers.

Quizplus · Accepted Answer

The Answer of Software programs have been introduced that allow you to use your personal computer like a telephone to talk to others who own the same software. One such program costs $50 to buy and allows you to make unlimited calls for free. The economics of substitutions and complements are present in this scenario.
 a. Explain in economic terms the effect of these products on the market for long distance telephone service.
 b. Explain in economic terms the effect of these products on the market for personal computers.

Software Programs Have Been Introduced That Allow You to Use