You are the manager of a midsized company that assembles personal computers. You purchase most components-such as random access memory (RAM)-in a comptetitve market. Based on your marketing research, consumers earnings over $75,000 purchase 1.3 times more RAM than consumers with lower incomes. One morning, you pick up a copy of The Wall Street Journal and read an article indicating that a new technological breakthrough will permit manufacturers to produce RAM at a lower unit cost. Based on this information, what can you expect to happen to the price you pay for radom access memory?
Would your answer change if , in addition to this technological breakthrough, the article indicated that consumers incomes are expected to grow over the next two years as the economy pulls out of recession? Explain.