Prices of smartphones (assume that this is a normal good)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 attributed to the fact that the supply curve for smartphones has shifted to the right more than the demand curve has shifted to the right. This is due to the fact that the price of components used to produce smartphones has fallen and consumer incomes have risen, leading to an increase in the supply of smartphones. As a result, we have seen an increase in competition among smartphone suppliers, leading to falling prices.

Prices of Smartphones (Assume That This Is a Normal Good)have