Phase 1 Individual Project
Principles of Microeconomics
Colorado Technical University
The graph shows a demand curve. A demand curve is a graph showing the relationship between the price of a good and the quantity of the good demanded. If there is an overall increase in income the demand for the A-Phone will increase. The income that buyers have available to spend influences their willingness and ability to purchase a good. The income is increasing as well as the demand for the demand for the A-Phone so the demand curve will shift to the right.
If it was discovered that there are health concerns when using cell phones then the demand for cell phones will decrease. The demand for cell phones will decrease because nobody is going to buy a product that can potentially cause health problems. Most often times the price will decrease also because the companies are trying to get rid of the quantities that have already been supplied. The demand curve will also shift a little to the left.
If the market price for cell phones goes up the supply or quantity will increase. As the price of the cell phones rises, businesses will increase the quantity they supply.
A supply curve is a curve that shows the relationship between the price of a product and the quantity of a product supplied. If it becomes more expensive to produce cell phones then the price and quantity will go up. The supply curve will shift to the right because there is an increase in quantity.
Another business starts producing cell phones and there are now three producers in the market. The number of companies in the market changing will cause a change in supply. When new companies enter into a market, the supply curve shifts to the right and when existing companies leave the market, the supply curve shifts to the left.
Market equilibrium happens when quantity demanded equals quantity supplied. A new manufacturer debuts the...