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PRESENTATION ON
MANAGERIAL ECONOMIOCS
UNDER GUIDANCE OFDr. TAMINDER KAUR
During the 1990s, technological
advancement reduced the cost of computer
chips.
Moore’s law and VLSI. Moore’s law states that the number of transistors placed inexpensively on an integrated circuit doubles every two years.
This law was made by Mr. Gordon Moore, Intel co-founder.
This law was made in 1970 but it was applied in 1990, because the demand of personal computer increased and also because of VLSI technology.
Between 1990 and 2002 there was a large fall in
the price of computer chips. Here are some
components of the explanation of this dramatic
price fall.
• Demand for chips was so great that there was a
shortage, analysts were forecasting record growth
and manufacturers were unveiling plans for dozens of
$1bn chip factories. . . .
• The shortage rapidly turned into surplus, and
the price of dynamic random access memory (D-
Ram) chips-the basic memory chips for PCs-has
dropped by about 65 per cent
The story points to two key elements to the
developments in this market. First, the technology of
producing computer chips is evolving rapidly. This causes
the market supply curve to shift rightwards continually.
The second element is the negatively sloped demand
curve, which shifts in some periods.
The trend decline of '20 per cent to 30 per cent each year'
is clearly shown in the chart. So is the abnormal period
The Technological advancement no doubt
reduced the cost of Computer chips that affected
the computer market in the area. The low cost of
computer chips has the following affects in the
computer industry:
The cost of chips reduced not only affected the computer
market but also computer software market. Although the
software market has no directly affects with the low cost of
computer chips. But As the Demand rule says that prices affect
the demand for goods. so, the chips cost not only increase the
demand for computers but also reduced the computer
products.
COST OF GOOD SOLD-REDUCED
The other impact of reduced cost of chips was the high
demand for software, although its not directly related to
it, but now those people who was not able to buy
computers are now able to buy it with new software's.
The computer market also affected the software market
due to reduction in price of chips.
SOFTWARE DEMAND SHIFT-UP
This reduction of chip price had also affected
positively the purchasing power of the buyer. The
person who was not able to buy the computer can
now buy it easily. Because the price reduction of chips
shifted the computer prices down as well.
PURCHASING POWER-HIGH
With all other affects in the industry, a positive
affect was the size of computer market. It had
greatly increased the number of buyers in the
economy.
SIZE OF MARKET INCREASE
The country earned a huge foreign exchange through
export of chips and computer. The manufacturers of
chips and computers earned lot of profit through large
volume of sales.
IMPACT ON FOREIGN EXCHANGE
The reduced cost of chips had also affected the
number of buyers. International transaction also
increased in that way.
NUMBER OF BUYERS INCREASE
THANK YOU…..
PRESENTED BY SUKHJIT RAJAT TARUN MOHIT GOURAV