3. Using a supply-demand diagram, show the effect of the following events on the market for
personal computers
a. The price of computer chips falls
b. There is a rise in consumer incomes
c. The price of computer software rises
d. Universities require all new students to have their own personal computers



Answer :

Final answer:

A rise in demand for personal computers can explain the increase in sales at lower prices due to market dynamics.


Explanation:

A rise in demand for personal computers would most likely explain the outcome of more computers selling at lower prices in the market. When demand increases, it pushes prices down due to the higher quantity being demanded.

On a supply-demand diagram, a rise in demand would shift the demand curve to the right, resulting in a higher equilibrium quantity and a lower equilibrium price. This shift reflects the increased desire for personal computers leading to more being sold at lower prices.

Additionally, this scenario aligns with the concept that market forces drive personal computers to become common items through price adjustments based on demand and supply dynamics.


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