Explain economy pulls out of recession


You are the manager of a midsized company that assembles personal computers. You purchase most components-such as random access memory (RAM)-in a competitive market. Based on your marketing research, consumers earning Market Forces: Demand and Supply 69 over $75,000 purchase 1.3 times more RAM than consumers with lower incomes. One morning, you pick up a copy of The Wall Street Journal and read an article indicating that a new technological breakthrough will permit manufacturers to produce RAM at a lower unit cost. Based on this information, what can you expect to happen to the price you pay for random access memory? Would your answer change if, in addition to this technological breakthrough, the article indicated that consumer incomes are expected to grow over the next two years as the economy pulls out of recession? Explain.

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Microeconomics: Explain economy pulls out of recession
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