Interactions of The Laws of Demand and Supply in the Personal Computer Essay

Interactions of The Laws of Demand and Supply in the Personal Computer Market - Essay Example This rising demand has led to the fall in prices of the computers. The objective of this study is to analyze the factors that have led to the fall in prices of computers. This would help in understanding the theories of economics related to market demand-supply and undertake an analysis to find the application of the underlying theories of economics in practical conditions of the market. The study would help to provide an insight of the impacts of changing market condition on the prices of the products. The effects of the increase in demand of the computers on its prices in the market could be explained by relating the actual market scenario with the concepts of economic theories. The study also helps us to understand the effects of changing behavior of the market with the help of supporting data and diagrams. Analysis In economics theory, the demand and supply of a product plays an important role in determining the price of the product. The fall in prices of the computer is also att ributed to a change in the demand of the computers. The price of computers would vary until the market reaches a point of equilibrium where the demand of computers is equal to the supply of computers (Carbaugh, 2011, p.11). Since the prices underwent a change with respect to the change in demand and supply of computers, the product is said to be elastic. The increase in demand of the computers in the market can be attributed to factors like increase in the number of population, change in preference, taste and level of livelihood, and finally increase in income levels of the people. More people started to afford computers which led to increase in demand of the computers. A statistical analysis given below shows that the number of computers... This paper offers a thorough analysis of the recent tendencies on the personal computer market, which are determined by interactions of the underlying economic laws. The objective of this study is to analyze the factors that have led to the fall in prices of computers. The distribution and cost of goods in a free market are based solely upon the demand and supply of the products. The distribution and cost of goods in a free market are based solely upon the demand and supply of the products. The analysis conducted helps in understanding the theories of economics related to market demand-supply. The application of the underlying theories of economics in practical conditions of the market is considered. The study provides an insight of the impacts of changing market condition on the prices of the products. The effects of the increase in demand of the computers on its prices in the market could be explained by relating the actual market scenario with the concepts of economic theories. The demand of computers increased over time due to several factors. The rise in demand of computers would cause rightward shift of the demand curve leading to rise in the quantity demanded and rise in prices of computer. In order to maintain the position of equilibrium, the supply levels to the market also increased. As a result of increased supply, the supply curve would shift rightward leading to rise in the level of quantity supplied and a reduction of level of prices of computer. The quantity available increased leads to fall in prices.