To understand the computer industry, we have to allow for a complication. Computers vary quite widely in quality. Over the years, technical progress has made computers both cheaper and more powerful. To allow for the improvement in quality, we can think not of the demand for a certain number of computers, but for something like a demand for computing power. Then a computer with twice as much memory and hard disk space, and twice as fast a processor supplies (roughly) twice the computing power.
Cheaper individual computers and increasing computing power per computer both make computing power cheaper, so the fall in the price of computing power over the last 50 years has been truly remarkable. And the demand for computing power is elastic. That means that every time the price of computing power has dropped by 1%, sales of computing power has increased something in excess of of 1%, and so industry revenues have increased. And this has been going on steadily for half a century, making the computer industry one of our most important.
