QUESTION
Q17) Suppose the technology for producing personal computers improves and, at the same time, individuals discover new uses for personal computers so that there is greater utilisation of personal computers. Which of the following will happen to equilibrium price and equilibrium quantity?
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Solution:
The increase in supply and demand will lead to a new equilibrium in the market, with both the equilibrium price and quantity being determined by the intersection of the supply and demand curves.
Quantity will increase; price cannot be determined, as the equilibrium price will depend on the magnitude of the shifts in both the supply and demand curves.
Therefore, the correct answer is (c)
Correct option is (c)