Problem
Sellers of personal computers, PCs, to households quickly notice changes in consumer sensitivity to price because most are made to order. Draw and label a demand curve for PCs that is relatively insensitive to changes in price. Identify an initial price as P, and the quantity that would be demanded at this price as Q. Identify a lower price as P1 and show the quantity that would be demanded as Q1. Illustrate the effect of an increase in consumer sensitivity to price by drawing in a new demand curve, D1, that passes through P but is more elastic than D at lower prices. Show the quantity that would be purchased along this demand curve if the price were to fall to P1. Label this as Q2.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.