Question
Computer chips are used to produce computer hardware. Hardware and software are complements in consumption. If the price of computer chips rises, then the equilibrium software price will _____ and the equilibrium software quantity will _____.
Answers
GPT 3.5
If the price of computer chips rises, it will lead to an increase in the cost of producing computer hardware. As a result, the supply of computer hardware will decrease, which would decrease the equilibrium quantity of computer hardware.
Since hardware and software are complements in consumption, a decrease in the quantity of computer hardware will decrease the demand for software. This decrease in demand for software would lead to a decrease in the equilibrium software price and quantity.
Therefore, the equilibrium software price will decrease and the equilibrium software quantity will decrease.
Since hardware and software are complements in consumption, a decrease in the quantity of computer hardware will decrease the demand for software. This decrease in demand for software would lead to a decrease in the equilibrium software price and quantity.
Therefore, the equilibrium software price will decrease and the equilibrium software quantity will decrease.