Computers in China Demand & Supply Case Study
Computers in China Demand & Supply Case Study
Computers in China Demand & Supply Case Study
ZHUYIN
PINYIN Predictive text
CANGJI sound-based
English Proficient Formal writing for the Word Built-In Writing
Traditional Chinese Keyboards With Speech To Text
only romanization Chinese language Recognition
Chinese basic Next Word
system for Chinese
Characters More advanced All Sentence
Characters
Phonetics
Keyboard-less Laptops
Five Steps
• 1.Draw a demand-supply diagram and label the axes with the price and quantity of the
good or service in question.
• 2. Think about the events that you are told occur and decide whether they change
demand, supply, both demand and supply, or neither demand nor supply.
• 3. Do the events that change demand or supply bring an increase or a decrease?
• 4. Draw the new demand curve and supply curve on the diagram. Be sure to shift the
curves in the correct direction—leftward for decrease and rightward for increase. (Lots
of students want to move the curves upward for increase and downward for decrease
—works ok for demand but exactly wrong for supply. Emphasize the left-right shift.)
• 5. Find the new equilibrium and compare it with the original one.
• It is critical at this stage to return to the distinction between a change in demand
(supply) and a change in the quantity demanded (supplied). You can now use these
distinctions to describe the effects of events that change market outcomes.
Step 1: Initial Market Equilibrium
• the market equilibrium, the price at which quantity demanded equals
quantity supplied.
• No shortage or surplus of PCs.
• At the equilibrium price, buyers’ plans and sellers’ plans agree and the
price doesn’t change until some event changes either demand or
supply.
Step 2 : An Increase in Demand
• As the per capita income has risen in China and more and more
Chinese have wanted to purchase computers thus the demand
increases and the demand curve shifts rightward.
• At the Step 1 price, there is now a shortage.
• The price rises, and the quantity supplied increases along the supply
curve.
Step 3: An Increase in Supply
• As with improved voice and handwriting recognition technology, firms
have developed keyboard-less computers for the Chinese market thus
the demand increases and the demand curve shifts rightward.
• At the Step 2 price, there is now a Surplus.
• The price falls, and the quantity demanded increases along the
demand curve.
Summary
Increase in Both Demand and Supply
• An increase in demand and an increase in supply increase the
equilibrium quantity.
• Generally, The change in equilibrium price is uncertain because the
increase in demand raises the equilibrium price and the increase in
supply lowers it.
• In this example, it is supposed that the increase in demand is still
higher than the new increase in supply, thus the final equilibrium
price is higher.