One of the implications of price elasticity of technology products is that:
A) the cost of a semiconductor chip fabrication plant doubles every four years.
B) the magnetic disk areal storage density doubles annually.
C) customers not only buy more products as they become cheaper, but whole new markets employing new technology open up.
D) the value of chips in semiconductor-based devices appreciates every six months.
E) firms stock up on tech products and sell them once their prices increase.

Question

Quizplus · Accepted Answer

Price elasticity refers to how the demand for a product changes in response to a change in its price. For technology products, as they become cheaper, demand typically increases, not just because existing customers buy more, but also because lower prices make the products accessible to new customers and markets, leading to the development and adoption of new technologies.

One of the Implications of Price Elasticity of Technology Products