Edward’s Supply & Demand Assignment

Link: AMD Ryzen New Benchmark Leaks, World Records, Intel Price Drops And What To Expect On Launch Day

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The article describes the launch of Ryzen, a new line of computer processors by AMD. Previously, Intel had enjoyed a near-monopoly on processors as AMD did not offer anything close to Intel’s i-series. This meant that the equilibrium price of Intel’s processors was stable at a high price. However, after Ryzen’s release, the i-series of processors has dropped in price. This is the result of a change in a demand determinant, the price of substitute goods.

AMD is trying to compete not in performance, but in price. Since it performs similarly to Intel’s i-series, it is a substitute good. Furthermore, its low price means that consumers and computer manufacturers alike are more likely to purchase AMD over Intel, decreasing the demand for Intel processors. In response to the lower demand, retailers such as Amazon and MicroCenter have reduced the price of i-series processors by around 20%.

Intel Processor

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