1. The following graph represents the diffusion of innovation. It shows the dist

Question

1. The following graph represents the diffusion of innovation. It shows the distribution of technology consumers. The innovators are the first to adopt a new technology and the laggards are last. 2.5% Innovators Early AdoptersEarly Majority Late Majority Laggards 13.5% 34% 34% 16% A. Assume an amazing new life-changing technology, the iWidget, is announced today. Assign utility values (in the range of 1 to 100) to each type of technology consumer may receive from iWidget. Justify your answer. How will the innovator's price elasticity for an iWidget compare with and laggards' price elasticity for the iWidget? B. Explain your answer.

Explanation / Answer

A) As per diffusion of innovation consumers are categorized into:

B) Innovator's price elasticity for the iWizard is relatively inelastic, because change in price does not bring about any change in their quantity demanded. They purchase the product even at a high price because of sound financial condition and the demand is relatively inelastic.

Laggards' price elasticity for the iWizard is relatively elastic, as the change in price brings about high change in quantity demanded. These set of consumerswait desperately for the reduction in price and then only purchase the product. So the demand is relatively elastic.

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