laniiawesomee

24.10.2020 • 

Computers and Technology

[Related to the Don't Let This Happen to You page 142] A student was asked to draw a demand and supply graph to illustrate the effect on the market for smartphones of a fall in the price of displays used in smartphones, holding everything else constant. She drew the following graph and explained it as follows: Displays are an input to smartphones, so a fall in the price of displays will cause the supply curve for smartphones to shift to the right (from S1 to S2). Because this shift in the supply curve results in a lower price (P2), consumers will want to buy more smartphones, and the demand curve will shift to the right (from D1, to D2). We know that more smartphones will be sold, but we can't be sure whether the price of smartphones will rise or fall. That depends on whether the supply curve or the demand curve has shifted farther to the right. I assume that the effect on supply is

greater than the effect on demand, so I show the final equilibrium price (P3) as being lower than the initial equilibrium price (Pi). Explain whether you agree or disagree with the stud analysis. Be careful to explain exactly what-if anything-you find wrong with her analysis.

Ответ:

MacieKay8865

31.10.2022

Computers and Technology

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Hey there!

The best answer choice is Choice B, or the second option.

Hope this helps, let me know if you need anything else. :)

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