Supply and Demand of Personal Computers
Today almost all households have a personal computer. The majority of households have multiple personal computers. In all the developed nations across the world, this is the norm. It is common to have one desktop computer and several additional laptops within the household. Twenty years ago, this was definitely not the norm. From 1995 to 2015, the price of a personal computer had decreased significantly due to the advancement of technology. Two of the basic principles of microeconomics are supply and demand. As the supply of a product rises to be greater than the demand, the price of the particular product decreases (Applications of Demand and Supply, 2010). This is a perfect example of the effects of supply and demand on the market for personal computers.
Twenty years ago, the personal computer was just beginning to spread to middle-class Americans (Comparing Today's Computers to 1995's, 2012). ...view middle of the document...
This invention was the World Wide Web also known as the internet. The each attraction of the internet along with what it could accomplish attracted consumers like never before (Rittenburg & Tregarthen, 2015). As time passed, there was a drastic increase in household consumers that purchased computers for their homes due to the appeal of the internet (Court, 2011). The internet opened the door to a whole new world.
As technology continued to advance, the physique of the computers improved. Along with the physique, the memory, processing system and storage improved as well. Also, any complements improved as well. Complements are any products that are consumed simultaneously with the main product (Applications of Demand and Supply, 2010). They go hand-in-hand with the main product. Regarding computers, software (such as Microsoft Office) and printers are complemented. They are usually purchased along with the computer.
As more and more consumers wanted to purchase personal computers for their homes, the demand increased for computers. Because the demand increased so much, manufacturers increased their production computers – the quantity supplied increased (Rittenburg & Tregarthen, 2015). They constantly increased their production of computers. By approximately the year 2000, computers had become a household item (Comparing Today's Computers to 1995's, 2012). This just increased in years to come.
However with the invention of the iPhone, which was the first smart phone, the access of the internet no longer had to be through a desktop computer (Court, 2011). After the smart phones, iPads and tablets were invented. This allowed the access to the internet with the capabilities personal computer. As this technology continued to advanced, there was an increase in the supply of desktop computers that had surpassed the demand for them (Home PCs, 2015). This caused the demand to decrease around the year 2012, which caused a decrease in the price of a personal computer (Court, 2011).
Today, a desktop computer can be purchased around $500, which is huge decrease compared to the 1995’s computer costing $2000. This is due to the advancement of technology affecting the supply and demand curves of the personal computer market.