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2. Explain and show (separately) on a graph how each of the following would affect the...

2. Explain and show (separately) on a graph how each of the following would affect the supply of calculators:

a. Technology for producing calculators gets better

b. More firms enter the calculator industry c.

The prices for calculators are expected to rise over the next month

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Answer #1

(a) Technology for producing calculators gets better. Because if this now producers can produce more with the same level of inputs .As a result, supply increases and shift to the right from S to S1. This is shown in the figure below:

(b) More firm's enter the calculator industry . This will increases the total supply of calculators in the industry.As a result, supply curve shifts to the right.This is shown in the figure below:

(c) Price for calculators are expected to rise in future.So, producers will supply more in the future. As a result of this supply of calculators fall now and shifts to the left. This is shown in the figure below:

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