Examine the Factors That Determine the Price of Computers in a Free Market.

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ASSIGNMENT

SUBJECT: STRATEGIC AND INNOVATIVE MARKETING

LECTURER: ELLIE SAMSER
STUDENT ID: L0698NINI0210

SUBMITTED DATE: 20/04/2010
EXECUTIVE SUMMARY:
In economics the market relations between the suppliers and consumers of a product are known as demand and supply. From a demand –supply model we can easily determine the price and quantity sold in a market of a particular good like personal computer. In recent market, the affordability of computer plays an important role in high demand of it and to fulfil the required demand suppliers/ producers supply more and more computer in market. There are a number of factors which affect the demand and supply of computers and hence the price is automatically determined from the demand-supply curve in a demand-supply model. The increasing number of population, preferences, income etc mainly affects the demand of computers. All these factors affect the demand of computers positively we get a clear right shift in demand curve that increases price and quantity of computers which may yield a shortage of computers in market. Also the supply of computers affected by number of suppliers, cost of the different factors of production, technology etc. These three factors have a positive impact on supply of computers in computer market so we see a clear right shift in supply curve which decreases the price and increases the quantity of computers which may yield the surplus of computers. Finally, we get the complete picture of the recent computer market if we combine both rightward shift of demand and supply curve of computer in market together in demand-supply model. In this case, the quantity increases but the price of the computer might fall or rise. For a certain shift of computer demand and certain shift of computer supply the price will not be changed but a little greater shift in supply curve than the certain shift will fall the computer price. Last but not the least, in the face of increasing demand of computers the price of the personal computer continued to fall only for the certain greater supply of computers in the market

BRIEF CONTENTS

Introduction ……………............................................................................. 1

Factors that affecting the demand of computers........................................2

Population/meeting the growing customer demands..................................3

Preferences.....................................................................................................4

Income.............................................................................................................5

Factors that affecting the supply of computers............................................6

Number of suppliers........................................................................................7

Cost of the factors of production....................................................................8

Technology.......................................................................................................9

Conclusion.......................................................................................................10

Introduction:
In Economics the market relations between prospective suppliers or producers and customers or consumers of a product are known as demand and supply. The price and the quantity sold in a market are determined by the demand and supply model. Supply and demand interact, each having an effect on other. When the supply increases and exceeds the demand, then suppliers nee to compete for buyers or consumers. At that time sellers need to lower their prices to sell the existing quantity of the product. When demand is high, the sellers increase the price, and when the price increases, the circle of supply and demand starts again. This idea has been around for decades. This essay will discuss how the shifts in supply and demand affect decision-making. The affordability of...
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