... complementary products. For example, if compact disc players halved in price but compact discs quadrupled in price then demand for compact disc players would fall, not rise. There is also the consumer's income to consider. As incomes rise the demand for certain goods will fall, (inferior goods) and the demand for other goods will rise, (superior goods). The price of those goods is not what influences the change in demand, the increase in income is. Finally there are the tastes and preferences of the consumers. Dropping the price of out of date technology, however drastic, will not increase demand. (i.e. the demand is inelastic for the duration of the trend or generation of technology.) There also has to be a willingness to supply and as it is assumed that companies exist to make maximum profits the nature of costs play an important part. The costs a company incurs can be ...

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