Answer
The equilibrium price and equilibrium quantity for computers, respectively, decreases and increases. The equilibrium price and equilibrium quantity for computer software, respectively, increases and increases. The equilibrium price and equilibrium quantity for typewriters, respectively, decreases and decreases.
Work Step by Step
Since a computer chip is an input for a computer, decreasing the cost of computer chips shifts the supply curve to the right. This causes the equilibrium price and equilibrium quantity for computers, respectively, to decrease and to increase.
Since computer software complements computers, the lower equilibrium price for computers increases the demand for computer software. This increased demand increases the equilibrium price of computer software and increases the equilibrium quantity of computer software.
Since a computer is a substitute for a typewriter, the decreased equilibrium price of a computer decreases the demand for typewriters. This is caused by a leftward shift in the demand curve for typewriters. The leftward shift would then have a new decreased equilibrium price and a decreased equilibrium quantity of typewriters.
