Assume that smartphones are a normal good,and that the prices of smartphones have fallen in recent years.Over this same period,the price of the components used to produce smartphones has also fallen and consumer incomes have risen.Which of the following best explains the falling prices of smartphones?
A)The supply curve for smartphones has shifted to the right while the demand curve for smartphones has shifted to the left.
B)The demand curve for smartphones has shifted to the right more than the supply curve has shifted to the right.
C)The demand curve and the supply curve for smartphones have both shifted to the left.
D)The supply curve for smartphones has shifted to the right more than the demand curve has shifted to the right.

Question

Quizplus · Accepted Answer

The falling prices of smartphones can be explained by the shift of the supply curve to the right, which is due to the falling prices of components used to produce smartphones. This increase in supply, combined with the fact that consumer incomes have risen, has led to a shift of the demand curve to the right as well. However, the shift of the supply curve has been greater than the shift of the demand curve, leading to an overall decrease in price.

Assume That Smartphones Are a Normal Good,and That the Prices