Use the graphs below to answer the questions about the market for Apple\'s curre

Question

Use the graphs below to answer the questions about the market for Apple's current generation iPhone. Move the supply and/or demand curve to illustrate how a decrease in the price of Samsung's current Galaxy smartphone impacts the market for iPhones. The above shift is a result of a change in the price of a Move the supply and/or demand curve to illustrate how an across the board cut in the price of all apps on the Apple App Store affects the market for iPhones. In this case, the shift occur as a result of a change in the price of a

Explanation / Answer

in first case

decrease in price of Samsung's current Galaxy smartphone ,samsung phones will be cheaper than apple phones comparatively, so customers will demand more for samsung, therefore demand for apple will decrease and demand curve will shift inward or leftward for apple phones

the above shift is a result of a change in the price of substitute good.

in 2 nd case

apps on the apple store are complementary good to apple iphone , therefore if apps become cheaper demand for apps as well as apple iphone will increase. and demand curve will shift rightward.

in this case, the shift occur as a result of a change in the price of a complementary good.

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