Question: Let's see if the forces of the market can be as efficient as a benevolent dictator. Since laptop computers are increasingly easy to build and since they allow people to use their computers wherever they like, an all-wise benevolent dictator would probably decree that most people buy laptops rather than desktop computers. This is especially true now that laptops are about as powerful as most desktops. In answering questions a-c, answer in words as well as by shifting the appropriate curves in the following figures.
a. Since it's become much easier to build better laptops in recent years, laptop supply has increased. What does this do to the price of laptops?
b. Laptops and desktops are substitutes. Now that the price of laptops has changed, what does this do to the demand for desktop computers?
c. And how does that affect the quantity supplied of desktop computers?
d. Now let's look at the final result: Once it became easier to build good laptops, did "invisible hand" forces push more of society's resources into making laptops and push resources away from making desktops?