The Graph Illustrates the Market for Computers

question 67

Multiple Choice

The graph illustrates the market for computers. If the number of buyers of computers increases and technology advances, you predict that the

• A) equilibrium quantity of computers will decrease.
• B) equilibrium price of a computer will fall.
• C) equilibrium quantity of computers will increase.
• D) equilibrium quantity of computers might increase, decrease or not change.
• E) equilibrium price of a computer will rise.

---

Definitions:

Marginal Utility

The increased contentment or advantage obtained by the consumption of an extra unit of a good or service.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers from participating in the market.

Utility

Utility refers to the total satisfaction received from consuming a good or service.

Diminishing Utility

The principle that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.