Question

According to an article in the Wall Street Journal the price of flat-screen televisions fell between...

According to an article in the Wall Street Journal the price of flat-screen televisions fell between 2001 and 2004 from more than $8,000 to about $3,000. During that period Sharp, Matsushita Electric Industrial, and Samsung all began producing flat-screen televisions. Use a demand and supply GRAPH to explain what happened to the quantity of flat-screen televisions sold during this period

Homework Answers

Answer #1

This pertains to be a case outward shift of the supply curve for flat-screen televisions between 2001 to 2004. With the entry of new firms, production was increased and this results in a rightward shift of the supplyc curve. This would have reduced the price and increased the quantity demanded and supplied of flat-screen televisions. This is shown below where price increased from p0 = 8000 to p1 = 3000

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