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There has been a marked technological improvements in
the iPhone industry. Holding other factors constant, otherwise refered to as
ceteris paribus in economic terms, an improvement in the technology used to
produce iPhones means that the manufucture have the ability to increse their
production levels as well as improve on quality. This means therefore that suppliers
are able to manufucture more iPhones at reduced costs. This in effect pushes
the supply curve further outwards. The outward shift of the supply curve means
the equilibrium price for the iPhones is lowered. At reduced prices therefore,
consumers are able to demand more iPhones meaning that the equilibrium quantigy
effectively goes up.
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Sep 24th, 2015
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