There are 2 brands of cell phones that are almost identical except for some minor features: the A-Phone and the Pomegranate.

Part I

Draw the demand curve for the A-Phone. Explain how the graph, price, and quantity demanded will change if the following occurs:

•There is an overall increase in income.
•There is an overall increase in income and people believe that the Pomegranate is now better than the A-Phone.
•The price of the A-Phone goes up when a flaw is found in the Pomegranate.
•A new type of walkie-talkie has an unlimited range and is basically free.
•It is discovered that there are health concerns when using cell phones.
•There is a baby boom.
•The price of the A-Phone and the Pomegranate both go up.
What happens to the supply of cell phones if the market price goes up?

Part II

Explain what happens to the price and quantity supplied and how it reflects on a graph if the following occurs:

•It becomes more expensive to produce cell phones.
•More cell phones are being produced with the same amount of inputs.
•Walkie talkies are popular because of the new technological change mentioned above.
•Another company starts producing cell phones, and now there are 3 producers in the market.
•People think the price of cell phones will go up in the future.
Part III

Draw a graph which shows the equilibrium price of cell phones. Explain what the graph is showing.

When the new manufacturer introduces the Robo cell phone to the market, how does that effect the equilibrium price if the Robo is basically the same as the other cell phones?

Part IV

As the public’s dependence on cell phones continues to grow, the cost of the phones may be decreasing, but the stronghold that telecommunication companies have on the public in regards to contracts and climbing fees is alarming.

Additionally, all cell phone companies charge about the same prices, and the consumers do not have much choice in substituting providers. Consumers appear to need some controls in this regard, and the government decides to step in.

•What is the effect of government intervention in the cell phone market? Make sure that you use graphs to illustrate your point.
•Is this a good thing for consumers?
On the other hand, the government sees the increase in cell phone use as an opportunity to make some additional revenue, and it decides to tax service providers.

•Who is really paying the tax?
•Illustrate your conclusion on a graph.
•Do you think that there is a free market for cell phone users? Why or why not?

Posted Date: 5/27/2012 12:26:18 PM | Location : United States

Ask an Expert

Related Discussions:- Microeconomics, Assignment Help, Ask Question on Microeconomics, Get Answer, Expert's Help, Microeconomics Discussions

Write discussion on Microeconomics
Your posts are moderated

Write your message here..

Related Questions

Apply relevant legislation and guidance - law, Jim and Maureen Stewart live... Jim and Maureen Stewart live with their two children, Hamish aged 11 and Alexandra aged 13, in a council owned property within an inner London borough. Jim has a long standing diag

Nano optics, what is nano optics what is nano optics

Study, Do you have global english assigment''s answers? Please Do you have global english assigment''s answers? Please

Plasama display and LCD, advantages and dis advantages of plasma display an... advantages and dis advantages of plasma display and LCD?

Social, why does level development different m one country to anothrfro why does level development different m one country to anothrfro

What is baroque art?, What is Baroque Art? In fine art, the term Baroqu... What is Baroque Art? In fine art, the term Baroque (derived from the Portuguese 'barocco' meaning, 'irregular pearl or stone') define a rather complex idiom, originating in Rom

Japan Tsunami Spatial distribution, im doing a assessment on japan tsunami ... im doing a assessment on japan tsunami 2011 and I need to describe spatial distribution and I don''t understand

English, what is the character sketch of the swindler in the story dusk by ... what is the character sketch of the swindler in the story dusk by saki?

Show the therapeutic process, Problem 1: Critically show, with the use ... Problem 1: Critically show, with the use of examples, how the personal history of individuals will be useful in the therapeutic process. Problem 2: Show, as a prospect

Foundation Course in Science and Technology Bachelor’s De, Describe the ... Describe the factors which decide the broad area of Scientific activity?