Running head: CHANGES IN PRICE 1

The Changes in Price Caused by New Inventions.

Name

Institution
CHANGES IN PRICE 2

The Changes in Price Caused by New Inventions

What is a telephone? It is a telecommunications device that allows at least two people to

communicate when they are far apart. It converts sound to electronic signals that are transmitted via
cables and then eventually transformed back to human voice. Though Antonio Meucci is credited
with the invention of the first telephone in 1849, it is Alexandre Graham Bell who won the device's
first patent in 1876 and is consequently regarded as the inventor of the telephone. The creation of
the phone was inspired by the need to incorporate human's voice in sent messages as prior
inventions such as the telegraph did not have this feature. This presentation seeks to analyse how
the design of the telephone may have caused a change in price.

In the years following its discovery, changes in price of related capital or labour occurred
either positively or negatively. An example of a suitable price change is the increase in the
production of copper wires needed for the production of cables. Early telephones relied on the use
of wires for the transmission of electronic signals and with the increase in the number of users, more
cables needed to be laid down. The increase of telephone cables was simultaneous with the rise in
the number of workers required to produce the copper wires and needed to lay down the cables,
consequently leading to a likely surge in labourers' wage income. An increase in the number of
switchboard users could have also led to a rise in the total wages of the workers (Anon, 1998). On
the flipside, the earlier required skilled operators of the telegraph who knew the Morse code was no
longer necessary since its use had drastically declined as a result of a substitute, the telephone. The
wages of the operators probably fell due to a decline in the use of the telegraph.

To accurately test this hypothesis that a new design could cause a change in price, past price
data on the percentage of production of copper wires and cables in the years after the development
of the telephone and on the actual number of employees working as skilled operators of the Morse
code will suffice. These data would relate the number of employees and their total wage price to the
years following the telephone invention to carefully describe the effect(s) the development had on
prices.
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References

Anon (1998). The Evolution of Telephone Cable. Copper Applications in Innovative

Technology.

Begović, B. (2016). Robert J. Gordon: The Rise and Fall of American Growth: The US Standard of

Living Since the Civil War, Princeton University Press, 2016. Panoeconomicus, 63(5), 627-636.