ExampleforAssignment_1

ExampleforAssignment_1 - People will buy more computers at...

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Example for Assignment # 1 Problem : Dell Computer Corporation decides that they have to be more competitive in their pricing by lowering costs. Therefore Dell decides to outsource all technical help overseas by paying foreign workers less. What will happen to the price and quantity of Dell computers? P Computers The price of computers will go down from P1 to P2 and the quantity will increase from Q1 to Q2. People will buy more at lower prices.
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Unformatted text preview: People will buy more computers at lower price the law of demand states that quantity demanded varies inversely with Price. Reason for shift : Price of inputs the supply curve shifts to the right. The price of labor decreased and the supplier (Dell) is more willing to sell more at lower prices. The points people lose are in not giving a reason (determinant) for a shift. D S2 Q1 Q2 Q S P1 P2...
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This note was uploaded on 09/13/2011 for the course ECON 102 taught by Professor Yotsubo during the Spring '08 term at Rutgers.

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