Supply, Demand, And Market Equilibrium - 1173 Words

I. Supply, Demand, and Market Equilibrium a) Determine the extent to which the supply and demand of your chosen product or service are sensitive to changes in price by applying the concept of elasticity. In other words, what is the price elasticity of supply or demand for your product or service? Apple does a very good job of always seeming to create a demand for their newest product. They try to keep enough supply on hand so that the customer doesn’t have to wait a long time to get the new product. They have created a pattern of coming out with a new phone that people â€Å"need† every year. I believe the supply and demand are usually about 6/7 months before people tend to want to wait for the new phone. If the demand goes down and then the†¦show more content†¦This will allow Apple to keep the demand high. c) Select two non-price factors that impact the supply of your chosen product or service. Justify your selections. Apple makes many of the parts needed to make the iPhone in other countries. This could become a problem if those companies ever change their laws or regulations. Also if the demand gets higher than the current supply, it could take longer to get the parts needed from those countries to make the phones. Apple choses to make many of its parts on China. In China the regulations are very different than in the U.S. This allows them to pay the workers less than they would if they were to use U.S. workers. Apple does its best to endure that workers are taken care and paid well but that is still up to debate for some. I believe this helps Apple keep their price lower which helps to keep the demand high. d) Define the industry and the market equilibrium associated with the product or service. The mobile market has continued to grow over the years with more and more of Apple’s competitors entering the smartphone market. It has also created more competitive prices (other than the iPhone) for customers who don’t want to shell out the big bucks to get an expensive phone. For the most part people know what type of phone they like or what company they prefer to do business with. IPhone is still very high on the top selling smart phones in the cellularShow MoreRelatedDemand, Supply and Market Equilibrium1107 Words   |  5 PagesDemand, Supply and Market Equilibrium Every market has a demand side and a supply side and where these two forces are in balance it is said that the markets are at equilibrium. The Demand Schedule: The Demand side can be represented by law of downward sloping demand curve. When the price of commodity is raised (ad other things held constant), buyers tend to buy less of the commodity. Similarly when the price is lowered, other things being constant, quantity demanded increases. 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