IP1 ECON Essay Example | Topics and Well Written Essays - 750 words

IP1 ECON - Essay Example The price could fall as the A-phone is trying to clear the stock of the current models while developing new models to compete with the promegranate. The curve is likely to move to the left due to a fall in demand. If there is an increase of the price of A-phone due to a flaw found in the promegranate, demand is likely to fall if there are other competitors, but if there is little or no competition, the demand is going to rise (Bernanke and Abel, 2000). The movement is going to move according to the change in demand. If there is a new type of walkie-talkie that has unlimited range, and is basically free, demand for the A-phone is likely to fall. The rate in the fall in demand will depend on how many unique features the A-phone has. There is large number of people interested in the unique features such as cameras, and mp3 players. The price must fall in order to attract buyers even when the walkie-talkie is free, therefore, the curve will shift to the left due to the fall in demand. If it is discovered that there are health concerns when using cell phones, there is will be a drastic fall in the demand and price, since few people w ill be willing to use the phone. In this case, the curve is likely to move to the left due to the fall in demand. If there is a baby boom, there will be an increase in customers and therefore demand is likely to increase, and the price is also going to increase. In this case, the curve is going to shift to the right. If the price of the A-Phone and the Pomegranate both go up, demand is likely to remain the same, however, if the other brands in the market do not raise their prices, the demand may fall. The graph is likely to remain the same if the demand remains the same. If the market price of cell phones goes up, the demand will go down. The supply will outweigh the demand. Therefore there will be excessive supply in the market. If it becomes more expensive to