Buyers in the market for iPhones learn that the price of the Samsung Galaxy has increased. Explain how this would shift demand in the market for iPhones.
iPhones and Samsung phones can be considered close substitutes, i.e. if the price of one increases, consumers may wish to switch to the cheaper alternative. This means the demand for the substitute will rise. In this particular case, as the price for Samsung phones increases, the demand curve for iPhones is likely to shift outwards/to the right.
TK
Related Economics A Level answers
All answers ▸If timber prices fall by 30%, what will be the expected % change in demand for timber in the economy if the Price Elasticity of Demand is -0.5, and explain the effect on revenue for a timber-selling firm.
What is the affect of expansionary fiscal policy on the economy?
How could I evaluate a government policy which uses subsidies for a certain industry?
Describe the effects of an indirect tax (ex. sales tax) on the market for cigarettes.