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`. SENJU EXHIBIT 2234
`LUPIN v sENJtT‘
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`IPR2015—01105
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`ECONOMICS
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`Seventeenth Edition
`
`PAUL A. SAMUELSON
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`Institute Professor Emeritus
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`Massachusetts Institute of Technology
`
`WILLIAM D. NORDHAUS
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`A. Whitney Griswold Professor of Economics
`Yale University
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`«
`*'
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`McGraw-Hill
`lrwm
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`Boston Burr Ridge, IL Dubcqce, 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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`PAGE 2 OF 3
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`
`THE DEMAND CURVE
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`49
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`viduals tend to buy more of almost everything, even
`if prices don't change. Automobile purchases tend
`to rise shzuply with higher levels of income.
`The size of the marke£—measured, 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 of substitute product B is
`low.
`(For example.
`if the price ‘of computers
`fails. will that increase or decrease the demand
`
`for typewriters?)
`in addition to these objective elements. there
`is a set of subjective elements called tastes or
`preferences. 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 (eating beef is popular in America but
`taboo in India, while curried jellyfish is a deli-
`cacy injapan but would make many Americans
`gag).
`Finally, ipet-ial influmccs 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 pn'ces, 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 changes inces-
`santly. Demand curves sit still only in textbooks.
`
`customers through the substitution 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.
`
`The explosive growth
`in computer demand
`We can illustrate the law of downward-s|op-
`ing demand for the case of personal com-
`puters (PCs). The prices of the first PC: were
`high. and their gomputing power was relatively
`modest.They were found in few businesses and even
`fewer homes. It
`is hard to believe that just 20 years ago
`students wrote most of their papers in longhand and did
`most calculations by hand or with simple calculators.
`But the prices of computing power fell sharply over
`the last two decades.As the prices fell, new buyers were
`enticed to buy their first computers. PCs came to be widely
`used for work. for school. and for fun. In the late |990s.
`as the value of computers increased with the development
`of the Internet. yet more people iumped on the computer
`bandwagon. Worldwide. PC sales totaled about I00 mil-
`lion in I999.
`
`Figure 3-3 shows the prices and quantities of com-
`puters and peripheral equipment in the United States as
`calculated by government statisticians. The prices reflect
`the cost of purchasing computers with constant quality-
`‘ that ls, they take into account the rapid quality change of
`‘die average computer purchased. You can see how falling
`yprice along with improved software. increased utility of
`Internet and e-mail. and other factors have led to an
`fegtplosive growth in computer output
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`Forces behind the Demand Curve
`tcletermines the market demand curve for corn-
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`- cs or gasoline or computers? A whole array of fac-
`influences how much will be demanded at a
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`n price: average levels of income, the size of the
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