How Does The Market Prices Affect The Demand For Cell Phones

1. A) a decrease in the income of cell phone users decreases the demand for cell phones. At the same price, fewer cell phones will be sold because the income has gone down. The demand curve will shift to the left. b), an increase in the prices of apps for cell phones will decrease the demand for cell phones. Apps are complementary products. Users of cell phones require apps. The decrease in demand means the demand curve will shift to the left. c), an increase in the number of consumers in the market for cell phones increases the demand for cell phones. As there are more customers for cell phones, at the same prices more cell phones are required. The increase in demand means that the demand curve will shift to the right. 2. a) If the market price of glass used in cell phone screens increases, the prices of inputs of cell phone making also increases. The cost of

if the cell phone manufacturers expect the market price of cell phones to increase next month, less manufacturers will be willing to sell cell phones at the same prices now. The supply of cell phones decreases. The supply curve of cell phones shifts to the left. 3. a. The good or service market that might be affected limiting pollution via the cap and trade policy is the energy market. The California small businesses say that the cap and trade policy will increase the cost of annual housing, transportation, energy, and food costs by $3,900. The market they address is the energy market. The largest greenhouse-gas emissions are from power plants that are fuelled by fossil fuels. The energy market will be affected directly by limited pollution. The supply of electricity will be affected by the cap and trade policy. b. The cost of inputs of electricity will increase. This will decrease supply of electricity. At the same price, less electricity will be available. After the cap and trade policy, the supply curve will shift to the left in response to the policy. The supply of electricity will