1. The following graph represents the diffusion of innovation. It shows the dist
ID: 1126552 • Letter: 1
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 MajrityLaggards 13.5% 34% 34% 16% 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. A. B. How will the innovator's price elasticity for an iWidget compare with and laggards' price elasticity for the iWidget? Explain your answer.Explanation / Answer
A) Innovators are change lovers who love risks and new changes , early adopters are enthusiasts , early majrists are pragmatists , late majority are skeptics and in the end the laggards are change averse . So when there is an innovation , iWidget the maximum utility derived from it will be of innovators and the minimum will be of laggards . Since innovators are always eager to accept innovation , the satisfaction or utility they get from a new innovation is maximum . So utility values are the highest in case of innovators and it goes on decresing till it is lowest for laggards .
B) Innovator's price elasticity is very inelastic in nature . They believe that the new innovation will make their lives better now or in future , so whatever be the price they demand for the new product .
Laggard's price elasticity is also very inelastic . If the iWidget sells at a very high price , they will never demand it , while if it sells at lower price then also they will not buy it . Laggards are change averse , so whatever be the price their demand for the good always remains zero .
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