Flat Screen Technology

Paper Summary:

The paper relates that flat screen television prices are rapidly decreasing and consumers are responding by buying more of the sets. The paper also discusses how although demand is up, there appears to be excess supply. The paper predicts that since the market is perfectly competitive, it is likely that a number of competitors will see prices fall below average variable costs and will exit the market. The paper shows, therefore, how excess supply will be eliminated and the market will move toward equilibrium.

Outline:
Introduction
Economic Theory
Strategic Planning and Implementation
The Flat-Screen Television Market
Long-Run Commercial Potential
Conclusion

From the Paper:

"The laws of supply and demand are the most important determinant of market structures (Economics basics: demand and supply). The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good and vice versa. The law of supply states that when the price of a good rises, holding other factors constant, producers will be willing to supply more of the product. Price, therefore, is determined by supply and demand. Economic equilibrium refers to an equilibrium in a market where a market for a product has attained the price where the amount supplied of a certain product equals the quantity demanded."

Sample of Sources Used:

• Baker, S.L. (2003). Supply and demand. http://hspm.sph.sc.edu/COURSES/ECON/SD/SD.html
• Chinese flat-screen TV earnings lag. (2005, December 27). People's Daily Online. http://english.people.com.cn/200512/27/eng20051227_231041.html
• Economic basics: demand and supply. Investopedia. http://www.investopedia.com/university/economics/economics3.asp
• Panasonic leads Plasma TV market. (2006, March 24). SED Industry News. http://www.plasmatvbuyingguide.com/plasma-news.php?newsId=58
• Perfect competition. http://www.answers.com/topic/perfect-competition

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