Essay on Examine the Factors That Determine the Price of Computers in a Free Market.

Words: 2804
Pages: 12




SUBMITTED DATE: 20/04/2010
In economics the market relations between the suppliers and consumers of a product are known as demand and supply. From a demand –supply model we can easily determine the price and quantity sold in a market of a particular good like personal computer. In recent market, the affordability of computer plays an important role in high demand of it and to fulfil the required demand suppliers/ producers supply more and more computer in market.
There are a number of factors which affect the demand and supply of computers and hence the price is automatically determined from the
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All the factors outlined above is analysed separately with the help of supply-demand curve in below.
Factors that affecting the demand of the personal computers:
Some factors like population or meeting growing customer demand, preferences, income etc. are the main factors that affecting the price of computers.

Population/ meeting increasing customer demands:
Demand depends on the size of the population and the age structure of the population. The larger the size of the population the greater is the demand for all types of goods and services; the smaller the size of population, the smaller is the demand for all goods and services. (Parkin,2008)
As population growing in it’s own phase and also the modern world is mostly IT oriented as a result we cant imagine the daily busy life without PC. So it is very obvious the valued customer for PC increasing rapidly as well. As the population growing, world’s largest software maker Microsoft has revealed a surprising 30% leap in profits, which was boosted by awesome demand for Personal Computers. And the company said the sale is expected to continue.
An out-ward or right-ward shift in demand curve
In the demand-supply model we observe as demand curve shifts rightward, the equilibrium quantity of the personal computers increases and as a result the equilibrium price of the personal computers rises.

Demand of products sometimes depends on choice of the customers; which are their own