1 Supply and Demand in the Cell Phone Market Make sure to in

1. Supply and Demand in the Cell Phone Market. (Make sure to include a graph with the initial equilibrium price and quantity and the new price and quantity as well as an explanation to support your answer for each question.)

A. As wages increase for Apple Workers, what happens to the price and quantity of iphones?

B. As the price of drone phones decrease, what happens to the price and quantity of iphones?

C. If the government taxes cell phones, what happens to the price and quantity of cell phones?

Solution

A. As wage increases for Apple workers, the demand for iphones start increasing, prices start falling resulting in increase in the output of iphones.

Demand can change and the demand curve will shift, including change in price and the productivity of labor.

B. The PhoneDrone was crafted by the Indiana-based xCraft. Its latest quadcopter can be flown in a few different fashions. Users can enter a flight path and its flight can be controlled by iPhone. It the drone price decreases, the demand for it increases, thereby increasing the demand for iPhone as well. In short, you can control an airplane in flight just by holding your iPhone out in front of you.

3. Imposition of tax will certainly raise the price of mobile services but the quantity is unlikely to be affected because there are growing number of users in the mobile industry. Another reason confirms that the poor and the young are more likely to give up their landlines.

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