Question

Think about the demand for the three popular laptops: ACER, ASUS and DELL. Using supply and demand diagrams, explain the effect on the demand for ACER or the quantity demanded of ACER (other things remaining the same) as a result of the following: a) The price of an ACER falls? b) The prices of an ASUS and a DELL increase? c) Programmers who develop operating system for ACER become less costly to hire? d) In Sydney market, demand for ACER is given by the equation P = 24 – 2Qd and supply of ACER is given by the equation P = 6 + 4Qs. If Sydney market is in equilibrium, determine the equilibrium price (P) and quantity (Q) of an ACER and show the equilibrium condition in a graph. e) From the equilibrium in part d), if price of an ACER decreases to $14, what would be the quantity demanded for ACER, show this using a graph. In this case, calculate the price elasticity of demand for ACER.

Answer 1