Consumers and Computer Purchases

What will likely happen if consumers have more money to purchase computers?

A) a decrease in prices for computers and computer accessories

B) an increase in prices for computers and computer accessories

C) a decrease in prices for computers, but not computer accessories

D) an increase in prices for computers, but not computer accessories.

Answer:

an increase in prices for computers and computer accessories

Consumers having more money to purchase computers will most likely result in an increase in prices for computers and computer accessories. This statement is correct because, in a free-market economy, prices are established by the demand and supply, with minimum intervention of the federal government. So in this case, the more people buy computers and accessories, the more prices will rise. On the contrary, if fewer people are interested in buying these items, the prices will decrease.

Therefore, when consumers have more money to spend on computers, the demand for these products will increase, leading to higher prices for both computers and their accessories. This is a basic principle of economics where higher demand results in higher prices.