Suppose a decrease in the world demand for desktop computers causes the price of desktop computers to fall from $600 to $500. Before the fall in demand, Juna, a local computer dealer in Japan, used to produce 9,000 desktop computers and exported 50 percent of it to other countries every week. However, after the fall in demand, Juna reduced its production to 8,000 units and exports only 40 percent of its total output. a. What are the changes in the quantity sold to domestic consumers b. What are the changes in the consumer surplus? c. Sketch a diagram to illustrate the changes for Juna.
Suppose a decrease in the world demand for desktop computers causes the price of desktop computers to fall from $600 to $500. Before the fall in demand, Juna, a local computer dealer in Japan, used to produce 9,000 desktop computers and exported 50 percent of it to other countries every week. However, after the fall in demand, Juna reduced its production to 8,000 units and exports only 40 percent of its total output. a. What are the changes in the quantity sold to domestic consumers b. What are the changes in the consumer surplus? c. Sketch a diagram to illustrate the changes for Juna.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose a decrease in the world demand for desktop
computers causes the price of desktop computers to fall
from $600 to $500. Before the fall in demand, Juna, a
local computer dealer in Japan, used to produce 9,000
desktop computers and exported 50 percent of it to other
countries every week. However, after the fall in demand,
Juna reduced its production to 8,000 units and exports
only 40 percent of its total output.
a. What are the changes in the quantity sold to domestic
consumers
b. What are the changes in the
c. Sketch a diagram to illustrate the changes for Juna.
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