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