Answer to Question #264205 in Microeconomics for ann

Question

In the world of electronics overtime people realized the immense use of having a personal laptop. And at the same time the technology has improved significantly in last decade. In fact the technological improvement has surpassed the increase in willingness and ability to purchase a laptop. Given this piece of information, what in your opinion happened to the equilibrium price and quantity in market for personal laptop? Draw a diagram and explain your answer.  

Answer 1

The equilibrium price and quantity in the market for the personal laptop will face equilibrium at the varying supply and demand as the supply of of personal computer is more and more compared to demand. This shows that the technological improvement has surpassed the increase in willingness and ability to purchase a laptop. So, the equilibrium price will decrease slightly due to increase in supply and slight increase in demand. This is as illustrated below: