Using economic analysis, explain the possible causes of the increase in the sales of electronic goods such as mp3 players in recent years. [8]
by
paulcorcomangmailcom (student)
1. Using economic analysis, explain the possible causes of the increase in the sales of electronic goods such as mp3 players in recent years. [8]
The main causes of this increase in consumption of electronics is directly linked to the price mechanism and the changes that have occurred within the supply and the demand. Supply has increased as technological innovations have made production cheaper and more effective, while due to products offering more utility at lower prices, the demand has increased and was also extended. Moreover, due to the fact that electronics have become in essential part of modern life, demand has become far more inelastic as well. The term supply refers to the incentive to suppliers to produce a product at a given price point, while demand refers to the consumers’ willingness and ability to purchase a given product.