Answer to Question #297121 in Microeconomics for Malik

Question

Over the past 40 years, technological advances

have reduced the cost of computer chips. How do

you think this has affected the market for computers?

For computer software? For typewriters?

Answer 1

The demand for computers has been high because of the reduced cost of the computer chips, which has made the comp[uters more affordable. Since the computer chips and the computer software are complementary goods, their demands will also be high. The typewriters will have low demand because they are substitute goods for the computers.