Microeconomics Chapter 3 Question 21 Think about the demand for the three game c
ID: 1199607 • Letter: M
Question
Microeconomics
Chapter 3 Question 21
Think about the demand for the three game consoles: Xbox, PS3 and Wii. Explain the effect of the following events on the demand for Xbox games and the quantity of Xbox games demanded, other things remaining the same.
a.) The price of an Xbox falls.
b.) The prices of PS3 and a Wii fall.
c.) The number of people writing and producing Xbox games increases.
d.) Consumers’ incomes increase.
e.) Programmers who write code for Xbox games become more costly to hire.
f.) The expected future price of an Xbox game falls.
g.) A new game console that is a close substitute for Xbox games comes onto the market.
Explanation / Answer
21.
a. The demand for xbox rises
b. The demand for ps3 and wii rises and for xbox falls.
c. There is more output of xbox games and hence supply rises with prices of xbox falls.
d. Increase in demand for xbox, ps3 and wii
e. The supply falls with rise in price. The demand rises.
f. The demand for xbox rises
g. The demand for substitute rises with fall in demand for xbox. Hence the demand curve for xbox shifts to the left with less demand at less price
By,
Nishant Bhatt