Mr Yee's thinkers 15S38 by Staff Economics Yee Peng Fei

Decrease in price of input:

2015-03-27 05:14:22 UTC

Smartphone companies are setting up an increasing number of their factories in China.

With the high population in China and its limited number of jobs, many people are willing to work for lower wages compared to people from other countries such as USA.

With the cheaper labour cost, the marginal cost of production is lower as compared to other countries and production of smartphones increases. Therefore, the supply of smartphone increases and the supply curve shifts to the right. Causing the price of smartphones to fall and the quantity demanded for smartphones to increase.

Supply: Advance in technology

2015-03-27 05:14:38 UTC

Change in supply from the producers also increases the number of smartphones sold. Such change in supply is due to the reduction in the marginal cost of production, caused by an improvement in technology. With such technological advcances, many production and assembling processes become more automated, efficient and faster. This reduces the cost in hiring more workers for manual labour as machines can replace them, hence less money spent on paying wages. Hence, the reduction of marginal cost of production will make producers more willing to supply more to meet the increasing demand to maximise profits. Such increase in supply causes the supply curve to shift to the right.

Demand: increase in population

2015-03-27 05:15:58 UTC

There is an increase in population due to an increase in the number of foreign workers and foreign talents, despite the low birth rate. FT & FW are willing and able to purchase smartphones because of their lifestyle (tech savvy) This leads to an increase in demand for smartphones.

Chang

2015-03-27 05:16:28 UTC

Changes in taste/preference

2015-03-27 05:16:28 UTC

Change in preference and taste contributed to the raise in sales of smartphones. Advertisements by phone companies such as apple and sumsung portray smartphones in a fashionable light, fueling the need for people to constantly change their smartphones to keep up with the trend. As a result, the popularity of smartphones in general rose, leading to a shift in the demand curve towards the right, which in turn caused smartphone sales to increase

Change in income

2015-03-27 05:18:19 UTC

As people's income rises, their ability to buy goods increases(higher purchasing power) and this will cause the demand for most goods to rise. In the 21st century, people are becoming increasingly affluent and smartphones are considered as an essential item. There is an increase in demand, more smartphones sold. The demand curve will shift to the right.

Changes in tastes and preferences

2015-03-27 05:20:54 UTC

CHANGES IN PREFERENCE AND TASTE

chi_honghui_201 — 2015-03-27 05:21:01 UTC