Question

Desktop computers have fallen out of favor because consumers prefer portability. At the same time, the components needed to produce a desktop computer have decreased in price. Given these changes, what will happen to the equilibrium price for desktop computers?

Answer 1

The equilibrium price will fall because of a decrease in demand and increase in supply

Step-by-step explanation:

In the given scenario, the market for desktop computer is experiencing a decrease in demand, since users prefer portability, while also experiencing an increase in supply (with cheaper materials producer are able to increase productivity). Both of these factors lead to a decrease of the equilibrium price due to a decrease in demand and increase in supply.