If Improvements in Technology Have Reduced the Cost of Producing

question 301

Multiple Choice

If improvements in technology have reduced the cost of producing personal computers, you accurately predict that in the market for personal computers, there will be a(n)

• A) increase in the quantity supplied of personal computers, a reduction in the price, and an increase in the quantity demanded.
• B) increase in the supply of personal computers, a decrease in the price, and an increase in the quantity demanded.
• C) increase in the supply of personal computers, a reduction in the price, and an increase in the demand.
• D) decrease in the supply of personal computers, an increase in the price, and a decrease in the demand.

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Definitions:

Relatively Elastic

Describes a supply or demand curve in economics that shows a greater sensitivity or responsiveness to changes in price.

Price-Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Price-Inelastic

Describes a situation where the demand for a product does not change significantly with a change in the product's price.

Coefficient

A constant or numerical value that precedes and multiplies a variable within an algebraic expression.