Economics questions help to clarify?

E

ebears

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the manufacturer will be able to produce the units cheaper

he will then be able to reduce the price

at the reduced price more people will be willing to buy the product. ( increase in demand)

the manufacturer will then increase production ( increase supply) to meet the new demand and maximize profit.
 
The question is below... I think the answer is supply, but I'm not sure If I'm getting all this 100%, can someone help explain?


If the only change to the "TomTom GPS Market" is that the price of microchips needed to produce the GPS unit decreases, would this be reflected as a change in demand or a change in supply for the TomTom GPS? Explain.
 
the manufacturer will be able to produce the units cheaper

he will then be able to reduce the price

at the reduced price more people will be willing to buy the product. ( increase in demand)

the manufacturer will then increase production ( increase supply) to meet the new demand and maximize profit.
 
the manufacturer will be able to produce the units cheaper

he will then be able to reduce the price

at the reduced price more people will be willing to buy the product. ( increase in demand)

the manufacturer will then increase production ( increase supply) to meet the new demand and maximize profit.
 
the manufacturer will be able to produce the units cheaper

he will then be able to reduce the price

at the reduced price more people will be willing to buy the product. ( increase in demand)

the manufacturer will then increase production ( increase supply) to meet the new demand and maximize profit.
 
the manufacturer will be able to produce the units cheaper

he will then be able to reduce the price

at the reduced price more people will be willing to buy the product. ( increase in demand)

the manufacturer will then increase production ( increase supply) to meet the new demand and maximize profit.
 
the manufacturer will be able to produce the units cheaper

he will then be able to reduce the price

at the reduced price more people will be willing to buy the product. ( increase in demand)

the manufacturer will then increase production ( increase supply) to meet the new demand and maximize profit.
 
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