The price of computer chips used in the manufacture of personal computers has fallen. This will lead to _________ personal computer?
Correct answer: D. an increase in the supply of
- A. a decrease in the quantity supplied of
- B. a decrease in the supply of
- C. an increase in the quantity supplied of
- D. an increase in the supply of
Explanation
Cheaper computer chips reduce firms' production costs, so they are willing to supply more personal computers at every price. This shifts the supply curve outward, rather than merely changing quantity supplied because of a change in the product's own price.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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