I have completed this template but I am not sure if I'm doing #3 and #4 correctly. Any help is appreciated.

Product Report Template

1. Choose a Product and a Trend

Before you begin, choose a product to study. Specifically, make sure to choose a product that is a consumer good. Keep in mind that goods are tangible products. For example, soft drinks, clothing, cars, and electronics are all types of consumer goods.

Product: Laptop Computers

For the product you've chosen, consider economic trends (real or hypothetical) that might impact this product. You should come up with at least two: one for supply and one for demand. Some examples that you may use:

• A change in preferences due to a fashion or health trend
• A shift in demographics due to aging populations
• An increase or decrease in the input costs (such as cost of raw materials or labor) needed to offer a product

Note: Although research is not required for this step, it is encouraged. See the Supporting Materials section of this project for some recommended databases.

Trend 1: Technology Advancements

Trend 2: Telecommuting - hybrid working

Please note that, while this section is not checked for mastery, it is needed as the basis for the rest of your project.

2. Determinants of Supply and Demand

For each economic trend you consider, describe it according to the determinants of supply and demand. Use the determinants from the following list:

• Demand: Income, prices of related products, preferences, demographic characteristics, buyer expectations
• Supply: Prices of factors of production, technology, returns from alternative activities, the number of sellers, seller expectations, natural events

Demand - The retail market for laptop computers has consistently risen and is expected to grow over the next five years. With the economy's recovery from the coronavirus pandemic's adverse effects, improvements in consumer spending and disposable income levels indicate an increase in purchases. As laptop computers prices decline, they will become an even more standardized tool in the home and workplace. The commonality of the internet and digital media in professional and daily life also makes the laptop computer a necessary item for many consumers. IBISWorld forecasts the percentage of households that own computers to grow at an annualized rate of 2.1% over the five years to 2026. Growing computer ownership indicates rising demand for computers and laptop computers specifically, which will be bolstered by rising disposable income levels and higher consumer spending (Daly, 2021). Employees are finding their job responsibilities can mainly be done from home. Many employees rarely or never teleworked. That culture has drastically changed.In addition to the workplace, laptop computers have significantly increased for students from elementary school up to college levels. This expansion has moved laptop computers from luxury to essential in everyday life. Demand is mainly generated by the replacement market rather than a new purchase. The need to upgrade a laptop computer is about every three to five years. The household income, price, and technology levels play a role in this ongoing investment. Employers will typically provide a laptop computer for the employee, but there can be strict limitations regarding how much personal usage of the same laptop computer is acceptable. However, it appeals to work or personal laptop computers; security and privacy are crucial for the employer. Therefore, a secondary purchase may result in personal usage. As a laptop computer increases in use and is tailored more for the individual user, each household member will require their own laptop computer. A typical household will have multiple laptops, and the number will depend on the number of household people. However, both age group and income might lead a consumer to choose a tablet instead of a laptop depending on the needs of the individual. Increasing household income levels could mean more disposable income to purchase laptops would increase demand. However, the opposite effect could occur if income is reduced or affected by a period of recession.

Supply - Technological advancements linked to the standardization of components and improved production methods allow retail prices to become more affordable, yet the prices vary depending on the laptop's intended use. This allows the consumer to select a computer that is within their budget and needs. However, improvement in technology could also result in a fall in the cost of production that would improve supply and possibly decrease demand from the older generation consumer and affect the price. The availability of laptop computers is due to multilayered supply chain disruptions and the imbalance of supply and demand. Global logistics played a troubling role in meeting the availability of laptop computers, whether they were new or refurbished. Manufacturers have been unable to obtain the needed products to assemble the laptop on a timely basis, affecting their availability. Due to many computing options, retailers should remain what appeals to all buyers in stock to meet the demands.

3. Model a Shift

Using one of the trends that you've described above, model the shift in supply or demand for this product. Make sure to use appropriate labels and terminology in your model.

Note: To model the shift in supply or demand graphically, you may use the drawing tools in Microsoft Word, or use the graphing tool linked in the Deliverables section and take a screenshot. Alternatively, you may describe the shifts that will occur.

4. Rationale

Explain your rationale for this shift (based on the model above) using appropriate economics terminology. As you work, consider the following:

• The difference between a shift in supply or demand versus a shift in the quantity supplied or demanded
• How the equilibrium will shift

The demand for laptop computers has increased due to a change in consumer needs, tastes, and number of buyers. The supply of laptops computers has decreased due to labor shortages, pandemic-related disruptions including the availability of components and number of suppliers. If demand increases (demand curve shifts to the right) and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price. If demand decreases (demand curve shifts to the left) and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply increases (supply curve shifts to the right), a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply decreases (supply curve shifts to the left), a shortage occurs, leading to a higher equilibrium price.

5. Elasticity

The firm is also interested in understanding the elasticity of price for this product within the market. Consider a rise in the price of this product and determine if demand is elastic or inelastic based on an application of the determinants of price elasticity of demand.

For each of the determinants in the following list, consider the impact on the elasticity of demand for the product:

• Availability of substitutes
• Time
• Importance in household budgets
• Luxury or necessity (such as addictions or habits)

Typically, luxury items fall under elastic demand, and necessary products fall under inelastic demand. The laptop computer could have fallen into the luxury item at one point in the past. Still, it has become a necessity due to portability and the demands of telecommuting and hybrid work and schooling. Therefore, the laptop computer is inelastic.

The increase of costs for desktop computers leads people to move from them to lower-cost laptops. The laptop provided the same technology as the desktop computer but also was packaged for mobility. The fall in average selling prices allows more purchases by consumers. But the laptop also has its challenges. The cost of substitutes, or a good used in replacement of another, can have the same effect on laptops if they become too expensive. The rising price of substitutes would increase laptops demand, while the decrease in prices for substitutes would have a negative impact on demand.

People can start to look towards substitutes such as tablet PCs and smartphones if they can meet the exact needs that one looks for in a laptop computer for it to be a viable option. If the price of laptops increases and, therefore, its demand decreases, the need for substitutes will increase, which is called positive cross elasticity of demand. On the other hand, if the demand for laptops increases, the related products used with laptops, such as laptop carrying cases, audio headphones, webcams, and applications designed for laptops, will have increased demand. This is called the negative cross elasticity of demand. Depending on the consumer's type of usage and necessities it needs in a laptop, there are enough variations from high-end laptops from technology market leaders to the medium end provided by other companies. Since the medium-end laptops are in greater supply than high-end models, this adds to the price of high-end models and keeps the cost of the medium to the lower end.

6. Price Increase

The firm is considering how the price of this product might change its demand. Using your determination on elasticity, explain how a price increase would impact revenue for this product.

Due to the necessity of a laptop computer in both the employment and education sectors, the price could change its demand. However, they will likely continue to be purchased in both sectors even if a price increase. Therefore, revenue would increase, at least in the short term. Even in a post-pandemic environment that allows options for both sectors to return to pre-pandemic conditions, the need for laptop computers will likely continue, and the market to replace due to changes in technology or the way things were previously done will evolve.

7. Externalities

In addition to the trends and shifts, the company is also interested in understanding possible ramifications of this product on the larger world. Discuss a potential externality of a transaction for this product. It may be positive or negative. For example:

• Pollution from secondhand smoke or product waste
• Education as a result of product use
• Bacterial resistance due to overuse of antibiotics
• Widespread disease prevention due to vaccinations

Though "e-waste" is the commonly used term, EPA considers e-waste to be a subset of used electronics and recognizes the inherent value of these materials that can be reused, refurbished, or recycled to minimize the actual waste that might end up in a landfill or improperly disposed in an unprotected dump site either in the US or abroad (EPA, 2021).

Discarded electronic waste will be negatively impacted based on consumption and the ongoing need to replace the laptop computer due to either technological advances or the product no longer has a useful life. In addition, the manufacturing of laptop computers emits pollutants like carbon emissions arise.The marginal cost to computer manufacturing is greater than the marginal benefit to society.