Course work 2 Essay

Introduction The dynamics of any effort determine what factors will impact the demand and supply of a disrupticular good or assistant being bought or sold in that particular market. Some of the major factors that affect the demand for approximately kinds of products or services take consumer tastes, income levels, availability of substitute goods and their impairments, availability and prices of complementary goods, future price expectations and the everyday level of literacy of the population and population growth.The other aspect of any market would be the supply typeface how do the supply post factors impact the market for goods or services. For instance or so major factors include technological advancements, cost of production, the number of suppliers and regulatory frame overwork. A combination of these demand side and supply side factors determines the prices that markets ultimately charge from consumers given that the markets atomic number 18 aloneowed to function in a free market setting. applied science Market In particular the Computer Market.When we discuss the electronic computer market in isolation we moldiness meet that it is affected greatly by the overall technology market which plays a critical parting in determining which new products and services will be offered by these computers and how will these computers be make in the future. Technology has revolutionized the way we do business and other activities around the world. A significant constituent of technological revolution is the machine we call a computer. From the time of the first computers and up till estimable away we have witnessed remarkable qualifying.For starters lets just talk about the salmagundi in sizing of the computers. The point here is that ever since the advent of the computing machine and later the full fledged computer we have since tremendous amount of changes that have occurred along the revolution. These changes have had an impact on both the pri ce of the computer and also on the cost of production of a modern day computer. Demand grimace Factors The growth in variant technology products such as hand held devices, laptops, desk top computers, I-pods, I-pads, E-books, and PDAs are more(prenominal) or less examples of what the consumer of todays world has been buying and accepting for some time.The primary(prenominal) factor here is that close technological products are not market oriented rather they are product-led or developed with a perspective of generating enough interest and demand from the market as opposed to the idea of providing products which are necessary by the market. The demand for computers in specific can be divided into two broad categories first the demand from the corporate world or offices and secondly from home users who demand desktops. When companies around the globe started to lend oneself and use desktop computers in the 1980s and 1990s one could see a revolution taking place that would fo rever change the workplace.These companies converted there existing manual operations on to computers and resultantly we truism dramatic changes in efficiency levels and the ability of companies to become more productive increased many an(prenominal) folds. (Samuelson, 2005) This change in the way companies work led to computers becoming a need for majority of the companies in different sectors such as manufacturing, services and primary related industries. The computers, especially desktop computers had become a emergency for companies by mid-90s and onwards. This factor had made computers an important part of any firms capital requirements.(Samuelson, 2005) As far as the households were concerned computers soon after they were being mass-produced in the 80s become a requisite because of the change in the societal factors and requirements at workplace and schools demanded households to have computers at home. During these similar times (80s and 90s) income levels of the middle rank households also increased on yearly basis. This was especially the case in the developing countries such as India, China and Brazil. The income levels were also rising in the developed countries which also warranted the increase in demand for computers.We apothegm that through the 1990s and 2000s the demand for complementary goods and services to the computers also increased. For instance the internet warranted the need for routers, wireless networks and other devices that were mandatory for office work and households. Similarly camera equipment that could connect them to PCs, mobile cables and other many products and services that were used in conjunction with the PCs were being increasely demanded. We also saw the strength in the demand for substitutes and a unvarying fall in their prices.For example a direct substitute of a computer is a handheld device which could be used for most of the purposes that a computer competency offer. Even though these substitutes were avai lable yet people ensured that they have at least one personal computer. This strength in demand is a result of the many features that a computer provides over some of its substitutes such as printing options, scanning, and video conference and so on. These added advantages and features have made computers an absolute necessity for the modern home.Another important factor that has played a critical role in increasing the demand for computers is the future expectations of technology and uncertainty. Because people feel that in the near future more idiom will be given on efficiency and productivity it is imperative to keep up to go through with the present technology. The combination of all these factors have created a scenario where by computers have become a part of the daily life of all individuals of the modern age. The internet has lone(prenominal) helped the cause of the computers and we see that computers are an all important(p) part of the workplace as well as the home of a particular individual.Supply-Side Factors The technological leap in the latter half of the last century has changed the way work takes place in a typical office of a manufacturing plant today. The reason is simple the computer and technologies related to the computer. Not only have computers made it easier for companies to make products faster but they have also made companies more conciliatory and technology hungry. The supply of computers has been increasing at a great pace not only because of juicy demand but also due to technological changes that are taking place at all times.Between 1990 and 2002 there was a large decline in the prices of computer chips this in part explains wherefore computers prices were still falling even though demand continued to rise during that period. An important factor to understand here is that after the initial increases in the demand in the early 90s soon there was a surplus scenario in the chip market secondly, the rapid change in technology meant that older machines were pronto becoming obsolete hence pushing the prices even further down.(Lipsey and Chyrstal, 2007) Source http//www.oup. com/uk/orc/bin/9780199286416/01student/interactive/lipsey_extra_ch03/page_01. htm In the diagram above we see that the prices of chips continued to fall between 1990 and 2002 except for the 92-95 period when the prices actually went up slightly the reason for the rise could be explained as the shift in the demand curve to the right as a result of the increase in the demand for complementary software that required advanced speed computer usage during this time such as multimedia programs or other caper and educational programs.The decline in the chip prices also explains the fact that cost of production was also declining cursorily during this time and that more and more suppliers of computers were entering the market. This increased controversy for customers meant that prices had an even bigger drop. The increased competition also m eant that firms that produce computers try to compete on cost as well as mark image.In an overall analysis of the supply-side of the computer and technology market we would say that prices have had a consistent downward pressure because of declining cost of production and a constant and rapid change in technology. at that place are a number of other important factors such as the availability of other important devices that have caused the prices of computers to fall down such as cheaper motherboards and RAMs. (Lipsey & Chrystal, 2007) Competition is also an important factor in determining the quality and prices of products such as computers.We see that competition has impacted cost of production by a large amount many firms that manufacture computer and related devices have introduced more and fail technologies that are cheaper and faster in processing data. In a lot of ways the market expects and demands computers which are cheaper and faster as we move into the future. This is because businesses and individuals know that computers are meant to reduce the time taken to complete work and achieve this objective in a cost effective way therefore more and more people and businesses demand cheaper computers.