Personal Computers: Supply and Demand

Personal computers can be considered to have a largely inelastic demand due to their integration into most people’s personal and professional lives. Though pricing and income levels may vary, computer purchase trends are likely unaffected (Hall, 2022). This is often due to the fact that a myriad of prices and options are available within the product’s market and therefore, all types of clients are able to find a fitting variation of a computer. Market-wide price changes are unlikely to influence demand as many require personal computers for personal and professional daily tasks. Largely because of the competition, substitutes for certain computers are computers from other brands within a similar price range. However, alternatives in the form of tablets and phones are also viable as substitutes. Laptops and desktops may also be seen as competitive products that offer a variety of advantages. A number of personal factors can dictate what clients consider a reasonable substitute, such as the product’s processing power, ability to suit their needs, mobility, and more.

A number of complementary products exist, such as headphones, keyboards, mice, and other accessories. They are similarly segregated by price ranges and compatibility with computers. Computers that are used for their utility can be seen as a neutral good that is not affected by increases in income levels as they are necessary to the livelihood of many individuals. However, they may also be seen as a normal good due to the higher price range of certain available technology. In case of an increase in income, certain individuals may purchase computers with better performances or even buy substitute goods such as tablets despite owning a computer.

Reference

Hall, M. (2022). Elasticity vs. inelasticity of demand: What’s the difference? Investopedia. Web.