When the price of Apple computers goes down, the demand for Windows-based computers likely decreases. This is because Apple and Windows-based computers are substitute goods. When the price of Apple computers becomes lower, more consumers will prefer to buy Apple computers over Windows computers, shifting demand away from Windows machines to the now relatively cheaper Apple alternatives.
Explanation of Demand Relationship
- Apple and Windows computers are substitute products, so a price decrease in one tends to reduce demand for the other.
- Consumers respond to the relative affordability and features; a lower Apple price means some who might have bought Windows will choose Apple instead.
- This substitution effect is a standard economic principle with competitive technology products.
Thus, a price drop in Apple computers commonly leads to a decline in demand for Windows-based computers. This relationship holds generally in product markets with substitutes like these.
