ipl-logo

Does Apple Pursue The Law Of Supply And Demand?

563 Words3 Pages

As stated by Mankiw & Taylor (2014) the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance is called the law of supply and demand. More specifically when quantity demanded exceeds quantity supplied there is a shortage of goods in the market. This results in an increase price such that quantity demanded equals quantity supplied. The new quantity demanded is lower and the new quantity supplied is higher compared to the original ones. However when quantity supplied exceeds quantity demanded there is a surplus and the effects on price, supply and demand are the opposite.
In the market for smartphones more than 70% of shares are owned by only ten firms biggest of which are …show more content…

The price staid roughly the same over the course of three quarters of a year. The demand at the given price declined over this period. In order to not generate surplus Apple started decreasing the price. The most significant drop happened when the next version of the iPhone was announced. At this price Apple attracted a new group of customers to buy soon to be the old generation iPhone. As newer and newer versions were announced the value of the iPhone 3GS decreased. To match up the demand Apple repeatedly reduced the price eventually discontinuing the production. The end of production may happen as early as the announcement of the second next generation as we observe in the case of the iPhone 3G. The events of reducing price occur similarly in every new …show more content…

They are determined by numerous factors including the law of supply and demand. Since Apple is aware of these factors they are able to set and change their prices accordingly thus gaining higher revenue.

References
Ahonen, T. (2014). Communities Dominate Brands: Smartphone Top 10 for Q2 of 2014, same ole same ole... [online] Communities-dominate.blogs.com. Available at: http://communities-dominate.blogs.com/brands/2014/08/smartphone-top-10-for-q2-of-2014-same-ole-same-ole.html [Accessed 13 Nov. 2014].
Dediu, H. and Dediu, H. (2013). How will iPhones 5S and 5C be priced?. [online] Asymco. Available at: http://www.asymco.com/2013/08/12/how-will-iphones-5s-and-5c-be-priced/ [Accessed 13 Nov. 2014].
Dediu, H. and Dediu, H. (2012). Samsung's basis of competition. [online] Asymco. Available at: http://www.asymco.com/2012/08/10/samsungs-basis-of-competition/ [Accessed 13 Nov. 2014].
Ismashphone.com, (2014). Infographic: iPhone Announcement vs iPhone Release Dates (iPhone 5 Rumor Factory) | iSmashPhone. [online] Available at: http://ismashphone.com/2011/03/timeline-wwdc-keynote-vs-iphone-release-dates-iphone5.html [Accessed 13 Nov.

Show More
Related
543 Words | 3 Pages

Accessed 23 Jan.

Read More
1595 Words | 7 Pages

Accessed 23 February

Read More
1219 Words | 5 Pages

Let’s say something happens and the supply or demand changes. This will affect the price and quantity of the items (p 100). If demand increases, then the number of items supplied by the producers increases but there is also an increase in price since they know the item is in high demand and people’s willingness to spend goes up and vice versa. If supply increases, then the number of items wanted by the consumers increases, but to get rid of that excess supply the prices go down and vice versa (p 95). Think of it as a clearance sale where they can’t lose too much money on each product but since it’s in such high demand they can still make a profit at a lower price.

Read More
505 Words | 3 Pages

This is evident in the simple supply and demand graph; as price goes up, supply will increase as more suppliers will be willing to supply at a high price, but the demand will decrease due to the high price, causing a surplus of products. A real life example would be the milk industry in the United States, where governments put a price floor above the equilibrium price to support the suppliers, causing a great surplus of dairy products. Another example is the San Francisco Earthquake in 1987, after the disaster the demand for bottled water increased drastically, causing a right shift of the demand curve in the market of water, however the supply of bottled water also decreased due to damaged pipes, therefore the price of bottled water increased. Many other suppliers may sell bottled water at that time with a very high price, this is called price gouging. High prices often does two things that benefits the economy, one is that it encourages the consumer to conserve the product and not waste it, the other is that it encourages suppliers to supply when a product is

Read More
1619 Words | 7 Pages

“It was also stated by Nagle and Holden (2002) that price can play a role as a monetary value whereby the consumer would trade it with the services or product that were being sold by the sellers (Nagle and Holden, 2002)”. “There are also studies that show price has a positive impact on behavioural intentions, as it is the factor which puts value onto a product and also influences consumer’s expectation (Swani and Yoo, 2010). “The level of price is found to undoubtedly affect purchasing behaviour primarily because price establishes image of the brand in the eyes of the consumer (Smith and Aaker, 1992)”. “According to Chen (2012), there is more than a handful of brands of smart phones that consumers can find easily in the market today, this would largely influence the consumers indicator on the pricing of each of the brands offered and would definitely affect their decision on purchasing smart phones (Chen and Ma,

Read More
1298 Words | 6 Pages

Accessed 1 June

Read More
406 Words | 2 Pages

T-Mobile offers the iPhone 6 for $549.99. T-Mobile also offers installment plans, $37.08 for 12 months and 27.08 for 18 months. The price for a single line on T-Mobile services would be $50.00 with one GB of internet and unlimited talk and text. Sprint Sprint is the third largest company in the United States. Sprint is offered nationwide.

Read More
476 Words | 2 Pages

if the cell phone manufacturers expect the market price of cell phones to increase next month, less manufacturers will be willing to sell cell phones at the same prices now. The supply of cell phones decreases. The supply curve of cell phones shifts to the left. 3. a. The good or service market that might be affected limiting pollution via the cap and trade policy is the energy market.

Read More
759 Words | 4 Pages

That 's what I mean, when you increase the price of tobacco products, the demand for this product will decline. (Inverse) relationship, because the required amount of falling prices higher and higher with a lower price, we say that the quantity required is linked to the negative price. When other factors constant (fixed). International conventions has led to lower tobacco prices, leading to increased demand for tobacco that will be used for the state to raise the tax on tobacco to avoid lower prices, which will lead to reduced demand for tobacco in spite of the presence of obstacles in

Read More
1021 Words | 5 Pages

Compare Mobile Android Vs iOS by Expert | OS | 0 comments Compare Mobile Android Vs iOS Compare Operating Systems iOS vs Android Phones 17 The mobile operating system is the set of programs that manages the hardware resources it.

Read More
1442 Words | 6 Pages

Normally, consumers have unique needs that are not similar all the times. Therefore, the company must develop products that can address the unique concerns of the consumers. Evidently, Apple Inc. has been successful in the creating variety of products. However, pricing of the Apple Inc. products tend to limit the ability of buyers to purchase the products. While the company might justify the price of the products, setting the prices too high limits the ability of the willing buyer to purchase the

Read More
641 Words | 3 Pages

Retrieved January 29, 2017, from http://www.investopedia.com/terms/d/deficit-spe Ross, S. (2015, January 27). What is the role of deficit spending in fiscal policy? Retrieved January 29, 2017, from

Read More
700 Words | 3 Pages

Today, almost every person caries a smart phone with them and some can’t survive the day without it. There are many companies and manufacturers who build smart phones like the popular ones such as Htc, Nokia, Samsung, Apple, Huawei, Motorola, Sony and many more, but what makes those companies not alike are the phones they release through the years, but are they that different? To compare, let us take an example of two leading rival companies in the field of smart phones, Samsung and Apple, who newly released their flagship devices, the Samsung Galaxy Note 4 and the Apple iPhone 6 plus. The Samsung Galaxy Note 4 features a 5.7 inch Super Amoled touch screen, a 16 megapixel back facing camera, an octa core processor with 3 gb of Ram and a 3220 mah battery whereas the Apple iphone 6 plus comes with a 5.5 inch retina display touch screen, an 8 megapixel back facing camera, dual core processor with 1 gb of Ram and a 2915 mah

Read More
964 Words | 4 Pages

It´s important to remember that disruption is positive for the mass-market and are innovations that make products and services more accessible and affordable, thereby making them available to a much larger population. When we look at the full extent of Xiaomi´s business model, we can clearly see how different and how disruptive it is. How does Xiaomi keep their prices at least 60% lower than their competitors? While Apple need to come up with a new model to maintain their high profits, Xiaomi have found a clever way to reach these profits without overserve the market with smartphones. For Xiaomi to sell high-end smartphones at such cost, Xiaomi keeps their models

Read More
840 Words | 4 Pages

(Nielson, 2014). Premium pricing can be define as the following; premiun pricing is to set a high price to reflext the exclusiveness of the product. It is possible for a company to charge e premium price as long as it has competitive advantage in its competing market. So far Apple has succeed in creating demand for its products which gives the company power over prices through product differentiation, innovative advertising, ensured brand loyalty, and a hype around the launced of new products. By focusing on customers willingness to pay more and mantaining a premium price at the cost of unit volume, Apple has also set an artificial entry

Read More

More about Does Apple Pursue The Law Of Supply And Demand?

Related Topics

Open Document