During the 1990stechnological advance reduced the cost of computer chipsHow do you think this affected the market for computersFor computer software and for typwriters?

Answer 1

Q. 3 During the 1990s, technological advance reduced the cost of computer chips. How do you think this affected the market for computers? (20) (i) For computer software. (ii) For typewriters The Technological advancement no doubt reduced the cost of Computer chips that affected the computer market in the area. The low cost of computer chips had the following affects in the computer industry: 1-Cost of good sold-Reduced: the cost of chips reduced not only affected the computer market but also computer software market. Although the software market has no directly affects with the low cost of computer chips. But As the Demand rule says that prices affect the demand for goods. so, the chips cost not only increase the demand for computers but also reduced the computer products. 2- Software Demand Shift-Up: The other impact of reduced cost of chips was the high demand for software, although its not directly related to it, but now those people who was not able to buy computers are now able to buy it with new soft wares. The computer market also affected the software market due to reduction in price of chips. 3- Purchasing Power-High: This reduction of chip price had also affected positively the purchasing power of the buyer. The person who was not able to buy the computer can now buy it easily. Because the price reduction of chips shifted the computer prices down as well. 4-Size of Market Increase: With all other affects in the industry, a positive affect was the size of computer market. It had greatly increased the number of buyers in the economy. 5-Number of Buyers Increase: The reduced cost of chips had also affected the number of buyers. International transaction also increased in that way. 6-Impact on Foreign Exchange: The country earned a huge foreign exchange through export of chips and computer. The manufacturers of chips and computers earned lot of profit through large volume of sales. The positive impact on foreign exchange makes the country prosperous and self-efficient in the economy. (ii) Answer:No effect on Typewriters, there is no comparison of computer with typewriter Raja Kibria rajakibria@hotmail.com Rawalpindi-Pakistan