Question 13

1pts

Use the three-step demand-supply analysis discussed in class to analyze changes to the equilibrium price, and quantity in the California computer market when Intel introduces a new but much cheaper computer chip (with the same computing power). Step 3: Draw the new shifted demand or supply curves, and use the demand-supply diagrams to analyze the impact of the new computer chip on equilibrium price and quantity.

Group of answer choices

Equilibrium quantity is higher and equilibrium price is lower.

Equilibrium quantity is lower and equilibrium price is higher.

Equilibrium quantity is higher and equilibrium price is higher.

Equilibrium quantity is lower and equilibrium price is lower.