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22 July, 18:49

Prices of smartphones (assume that this is a normal good) have fallen in recent years. Over this same period, the price of the components used to produce smartphones has also fallen and consumer incomes have risen. Which of the following best explains the falling prices of smartphones?

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  1. 22 July, 19:20
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    Economies of scale

    Explanation:

    economies of scale happen in very competitive market. The output increases so the prices drop. As technology gets more advanced, prices drop due to the economies of scale
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