8. Suppose a technological advance reduces the cost of making computers. a. Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and pro- ducer surplus in the market for computers. b. Computers and adding machines are substitutes. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for adding machines. Should adding machine producers be happy or sad about the technological advance in computers? c. Computers and software are complements. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for software. Should software producers be happy or sad about the technological advance in computers? d. Does this analysis help explain why software pro- ducer Bill Gates is one of the world's richest men?

8. Suppose a technological advance reduces the cost of making computers. a. Use a supply and demand diagram to show what happens to price, quantity, consumer surplus and pro- ducer surplus in the market for computers. b. Computers and adding machines are substitutes. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for adding machines. Should adding machine producers be happy or sad about the technological advance in computers? c. Computers and software are complements. Use a supply-and-demand diagram to show what happens to price, quantity, consumer surplus and producer surplus in the market for software. Should software producers be happy or sad about the technological advance in computers? d. Does this analysis help explain why software pro- ducer Bill Gates is one of the world's richest men?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 9PA

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