q.utoronto.c As you most certainly know, there are two dominant types of smartph
ID: 1140062 • Letter: Q
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q.utoronto.c As you most certainly know, there are two dominant types of smartphones. There are phones whose operating system is iOs (i.e, iPhones, all of which are made my one company, Apple) and there are phones whose operating system is Android. Android phones are made by many different companies, and we are going to assume a competitive market for Android phones. Furthermore, the value a consumer gets from a particular smartphone depends on the apps available for the smartphone. Indicate which of the following could, by itself, could explain a shift out (and up) of the Android-phone demand curve from 2018 to 2019? To receive full marks, you must check all factors which would lead to an increase in demand, and no factor which would not lead to an increase in demand. A decrease in iPhone prices. A decrease in consumer incomes if the Android is, on average, an inferior good. The introduction of free and popular virtual reality apps for Android. An increase in the quality of Android phones A decrease in iPhone quality An increase in consumer incomes if the Android is, on average, a normal good A decrease in the price of an Adroid phoneExplanation / Answer
A demand curve shifts when a determinant other than price changes. An outward shift in the demand curve for Android phones will occur when there is an increase in demand for Android phones.
Check all factors that will lead to an increase in demand for the android phone other than a change in the price of the android phone (because that will imply movement along the demand curve)
A decrease in consumer incomes if an android is on average an inferior good (Since the demand for inferior goods increases when income decreases, we can check this option)
The introduction of free and popular virtual reality apps for Android.
An increase in the quality of Android phones.
A decrease in iphone quality. ( This will lead to an increase in demand for android phones)
An increase in consumer incomes if the Android is on average a normal good. (Since the demand for a normal good increases when incomes increase, we check this option)
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