Examine the Factors That Determine the Price of Computers in a Free Market.
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
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
References: ▪ Parkin, Michael (2010). “Microeconomics”. Ninth Edition ▪ Parkin, Powell, Matthews (2008) “Economics”. Seventh Edition ▪ Solman, Jhon (2006) Economics, 6th edition, Prentice Hall ▪ ▪ ▪ http://online.wsj.com/article/SB10001424052702304370304575151883563037548.html?KEYWORDS=dell+sells+computers+in+credit[2] (access on 14 April 2010) ▪ ▪ ▪ -----------------------