Final answer:
The stages a new technological computer will undergo are Innovation, Penetration, and Saturation, with prices reflecting production costs, economies of scale, and market competition. The trend of lower computer prices can be attributed to increased supply due to technological improvements that reduce production costs.
Step-by-step explanation:
The question refers to the stages a new technological computer will go through during its two-year production before being replaced by a new model, and how its price will be reflected in each stage. The correct stages that such a product will go through are Innovation, Penetration, and Saturation. Initially, in the Innovation phase, the product may have a higher price due to its novelty and high production costs. In the Penetration phase, the price might drop slightly as demand increases and economies of scale come into effect. Lastly, during the Saturation phase, the price could potentially decrease further due to increased competition and market saturation.
In the context of recent trends in the computer market, with more computers selling at lower prices, the scenario is likely explained by a technological improvement that reduces costs of production, leading to an increase in supply. Supply curve shifts to the right, resulting in a decrease in prices. In this competitive market, technological advancements and efficiency gains drive prices down until economic profits reach a normal level, preventing new entrants into the market. This dynamic continually adjusts as new technologies and competitors emerge.