10. Think about the demand for the three game consoles: Xbox One, PlayStation 4,

Question

10. Think about the demand for the three game consoles: Xbox One, PlayStation 4, and Nintendo Switch. Explain the effect of each of the following events on the demand for Xbox One games other things remaining the same. The events are (a) The price of an Xbox One falls. (b) The prices of a PlayStation 4 and a Nintendo Switch fall. (c) The number of people writing and producing Xbox One games increases. (d) Consumers' incomes increase (e) Programmers who write code for Xbox One games become more costly to hire. (f) The expected future price of an Xbox One game falls. (g) A new game console that is a close substitute for Xbox One comes onto the market.

Explanation / Answer

a) There is a downward movement in the demand curve.

b) The demand curve shifts to the left because of fall in the price of substitutes.

c) It affects supply curve, there is no effect on the demand curve.

d) The demand curve shifts to the right due consumers' income rises so that they can demand more.

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