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Explain what would happen to the price and sales in Apple Iphone market if the following...

Explain what would happen to the price and sales in Apple Iphone market if the following occur: (1) cost of iphone glass is cheaper to make, (2) Increase in incomes in US and around the world and (3) Price of the Cellphone plans became cheaper due to competition.  Explain what will happen to the shifts and/or movements to the demand and supply curve in each case and then determine what happens to the sales and price Iphones. Each of the three cases is separate of the other.

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Answer #1

Apple Iphone market :

(1) cost of iphone glass is cheaper to make : Since production cost decreases , so supply of iphone will increase , supply curve shifts right causing quantity to rise and price of iphone to fall .

(2) Increase in incomes in US and around the world : Since consumer income rises so demand for iphones will rise , causing demand curve to shift right , quantity of sales and price of iphone both rises in this case .

(3) Price of the Cellphone plans became cheaper due to competition : Cellphone plans are complimentary goods to cellphones , so as plans become cheaper people will buy more cellphones . So demand for iphone rises , causing demand curve to shift right , quantity of sales and price of iphone both rises in this case .

  

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