1.2. Periodically, a computer chip maker like Intel introduces a new chip that is faster than the previous one. In response, demand for computers using the earlier chip decreases as customers put off purchases in anticipation of machines containing the new chip. Simultaneously, computer makers increase their production of computers containing the earlier chip in order to clear out their stocks of those chips.

Draw two diagrams of the market for computers containing the earlier chip:

(a) one in which the equilibrium quantity falls in response to these events and

(b) one in which the equilibrium quantity rises. What happens to the equilibrium price in each diagram?