Question

With the aid of well-labeled supply-demand diagrams, explain how the equilibrium price and quantity of notebook computers will be affected if
a) new suppliers enter the market
b) it is discovered that frequent use of computer is bad for health
c) the government requires that 25% of lessons taught in each school have to be conducted with information technology; and
d) earthquake occurs in a major notebook computer producing region

Answer 1

a) new suppliers enter the market: the supply will increase, the equilibrium price will decrease, the equilibrium quantity will increase.

b) it is discovered that frequent use of computer is bad for health: the demand will decrease, the equilibrium price will decrease, the equilibrium quantity will decrease.

c) the government requires that 25% of lessons taught in each school have to be conducted with information technology: the demand will increase, the equilibrium price will increase, the equilibrium quantity will increase.

d) earthquake occurs in a major notebook computer producing region: the supply will decrease, the equilibrium price will increase, the equilibrium quantity will decrease.