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`LUPIN V. SENJU
`IPR2015-01097
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`SENJU EXHIBIT 2234
`LUPIN v. SENJU
`IPR2015-01097
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`

`
`Seventeenth Edition
`
`Institute Professor Emeritus
`
`Massachusetts Institute of Technology
`
`A. u!1tney llnswol! !1ro!essor 0! Economics
`
`Yale University
`
`Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis
`Bangkok Bogota Caracas Kuala Lumpur Lisbon London Madrid Mexico City
`Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
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`
`THE -E
`
`49
`
`viduals tend to buy more ofalmost everything, even
`ifprices don’t change. Automobile purchases tend
`to rise sharply with higher levels of income.
`The size oft/is mar/zet—mea.sured. say, by the pop-
`ulation—clearly affects
`the market demand
`curve. California’s 32 million people tend to buy
`32 times more apples and cars than do Rhode Is-
`land's 1 million people.
`The prices and availability of ‘related goods influ-
`ence the demand for a commodity. A particu-
`larly important connection exists among sub-
`stitute goods—ones that tend to perform the
`same function, such as cornflakes and oatmeal,
`pens and pencils, small cars and large cars, or
`oil and natural gas. Demand for good A tends
`to be low if the price ofsubstitute product B is
`low.
`(For example,
`if the price ‘of computers
`falls, will that increase or decrease the demand
`
`for typewriters?)
`In addition to these objective elements. there
`is a set of subjective elements called taste: or
`‘bnjferevtces. Tastes represent a variety of cultural
`and historical influences. They may reflect gen-
`uine psychological or physiological needs (for
`liquids, love. or excitement). And they may in-
`clude artificially contrived cravings (for ciga-
`rettes, drugs, or fancy sports cars). They may
`also contain a large element of tradition or re-
`ligion -tting beef is popular in America but
`taboo in India, while curried jellyfish is a deli-
`cacy in japan but would make many Americans
`gag).
`Finally, .i'jJe/jal influences will affect the demand for
`particular goods. The demand for umbrellas is
`high in rainy Seattle but low in sunny Phoenix;
`the demand for air conditioners will rise in hot
`weather; the demand for automobiles will be low
`in NewYork. where public transportation is plen-
`tiful and parking is a nightmare. In addition, ex-
`pectations about future economic conditions.
`particularly prices, may have an important im-
`pact on demand.
`The determinants of demand are summarized in
`
`Table 3-2. which uses automobiles as an example.
`
`Shifts in Demand
`As economic life evolves, demand char? inces-
`santly. Demand curves sit still only in textbooks.
`
`customers through the substituuon effect. In addition,
`a price reduction will induce extra purchases of goods
`by existing consumers through both the income and
`the substitution effects. Conversely, a rise in the price
`of a good will cause some of us to buy less.
`
`he explosive growth
`in computer demand
`We can illustrate the law of downward-s|op-
`ing demand for the case of personal com-
`uters (PCs). The prices of the first PCs were
`gh. and their computing power was relatively
`modest.They were found in few businesses and even
`r homes. It
`is hard to believe that just 7.0 years ago
`ens wrote most of their papers in longhand and did
`t calculations by hand or with simple calculators.
`But the prices of computing power fell sharply over
`last two decades.As the prices fell. new buyers were
`ced to buy their first computers. PCs came to be widely
`or work. for school, and for fun.
`ln the late |990s.
`
`value of computers increased with the development
`lnternet. yet more people jumped on the computer
`agon.Worldwide. PC sales totaled about
`I00 mil-
`I999.
`
`igure 3-3 shows the prices and quantities of com-
`and peripheral equipment in the United States as
`ed by government statisticians. The prices reflect
`t of purchasing computers with constant quality—
`they take into account the rapid quality change of
`rage computer purchased. You can see how falling
`long with improved software. increased utility of
`net and e-mail. and other factors have led to an
`
`growth in computer output.
`
`
`
`es behind the Demand CLI
`ermines the market demand curve for corn-
`
`oline or computers? A whole array of fac-
`ences how much will be demanded at 21
`
`Ce: average levels of income, the size of the
`n.
`the prices and availability of related
` l
`'
`and social
`tastes, and special
`in-
`
`'
`
`‘mama of constuners is a key determ_i-
`of demand. As peoplels incomes rise,
`indi-
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