There is an increase in demand for personal computers at the same time their input costs fall. We would expect that:
A)price will fall, but the effect on quantity sold is uncertain.
B)the quantity sold will decline, but the effect on price is uncertain.
C)the quantity sold will increase, but the effect on price is uncertain.
D)price will rise, but the effect on quantity sold is uncertain.

Question

There is an increase in demand for personal computers at the same time their input costs fall. We would expect that:
A)​price will fall, but the effect on quantity sold is uncertain.
B)​the quantity sold will decline, but the effect on price is uncertain.
C)​the quantity sold will increase, but the effect on price is uncertain.
D)​price will rise, but the effect on quantity sold is uncertain.

Quizplus · Accepted Answer

When demand for personal computers increases, it typically leads to an increase in the quantity sold. At the same time, if the input costs fall, the production costs for the computers decreases, which allows companies to offer a lower price to consumers. This would result in an increase in the quantity sold, but the effect on the price is uncertain. Therefore, the best choice is C: the quantity sold will increase, but the effect on price is uncertain.

There Is an Increase in Demand for Personal Computers at the Same