After you have studied Reading Between the Lines on pp. 334–335, answer the following questions.
a. Describe the cost curves (MC and ATC) and the marginal revenue and demand curves for the iPhone when Apple first introduced it.
b. How do you think the creation of the iPhone influenced the demand for older generation cell phones?
c. Explain the effects of the introduction of the iPhone 5 on Samsung and other firms in the market for smartphones.
d. Draw a graph to illustrate your answer to part (c).
e. Explain the effect on Apple of the decisions by Samsung and others to bring their own smartphones to market.
f. Draw a graph to illustrate your answer to part (e).
g. Do you think the smartphone market is efficient? Explain your answer.
h. Do you predict that producers of smartphones have excess capacity? Explain your answer.