The price elasticity of demand is inelastic for Mobile Phones and elastic for Play-stations. Suppose that technological advance doubles the supply of both products (that is, the quantity supplied at each price is twice what it was). a. What happens to the equilibrium price and quantity in each market? Use a supply-and-demand graph for both Mobile Phones and Play-stations and analyze which product experiences a larger change in price and which product experiences a larger change in quantity. b. What happens to total revenue for each product? Briefly explain.
The price elasticity of demand is inelastic for Mobile Phones and elastic for Play-stations. Suppose that technological advance doubles the supply of both products (that is, the quantity supplied at each price is twice what it was).
a. What happens to the
and which product experiences a larger change in quantity.
b. What happens to total revenue for each product? Briefly explain.
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