Economics Questions and Answers

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Why have electronic devices like the iPod Nano gotten cheaper recently?

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pohnpei397 eNotes educator | Certified Educator

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To economists, a reduction in price must come either from a decline in demand or an increase in supply.  Both of these are involved in the decline in price, depending on the device.

For some devices, demand is going down as the device becomes less "cutting-edge."  If new versions of the device are coming out, older versions will experience drops in demand and their prices will fall.

For other devices, supply has increased.  This is often due to improvements in the manufacturing process and to economies of scale.  In other words, as the companies have learned more about making these devices, they have been able to reduce their costs.  This results in an increase in supply and lower prices.

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sciencegeek18 | Student

because its getting old since iphone's generstion is coming out =]