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Consider yourself as a decision maker for a firm that sell software to a large personal...

Consider yourself as a decision maker for a firm that sell software to a large personal computers manufacture. A report in the Daily News Paper tells that the demand for personal computers will fall by 8-10 percent over the next six months

What will be your business strategy after reading the above information in the Daily News Paper?

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Answer - As the decision maker , since the demand for the computers is about to fall , the price will also likely to fall. Hence , the current supply needs to be raised for the personal computers because , later in the period of Six months , the demand will fall leading to lower prices. Hence it will not be profitable to produce in that period. Hence the current supply needs to be raised in order to minimise the effect of losses and supply needs to be decreased in period when demand is falling.

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