Question

Consumers having more money to purchase computers will most likely result in

1- a decrease in prices for computers and computer parts.
2- an increase in prices for computers and computer parts.
3- a decrease in prices for computers, but not computer parts.
4- an increase in prices for computers, but not computer parts.

Answer 1

an increase in prices for computers and computer parts.

Answer 2

Among the choices, the answer is 2. Shoppers having more cash to buy PCs will no doubt result in an expansion in costs for PCs and PC parts. This is because the demand is higher, as the law of demand, the higher the demand the lower the supply, and it increases the price of the commodities.