Part 2: Supply and Demand

Read the article provided in a PDF format for you in the module from the Wall Street Journal called:

"Remote Work Fuels Laptop Boom --- Computer makers, already hit by supply disruptions, can't keep up with the demand" Needleman, Sarah E; Tilley, Aaron . Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Mar 2020: B.4.

In this article, the author describes changes in the laptop market that shifts both the demand and the supply curve. Assume that the laptop market can be modeled fairly well using the competitive supply and demand model. Answer the following questions:

1. What direction has the demand curve shifted? Why (associate it with a determinant of demand).
2. What direction has the supply curve shifted? Why (associate it with a determinant of supply).
3. Suppose the demand curve shifts by MORE THAN the supply curve. Using a supply and demand model, make a qualitative analysis of what will happen to the price and sale of laptops in a free market setting. Be sure to draw the supply and demand curve, label and initial equilibrium, shift the curves in the appropriate direction and label the new equilibrium. Compare the price and sales levels in words.