Milestone Two Econ
Milestone Two: Supply and Demand Conditions and Price Elasticity of Demand
Jason Strawbridge
Microeconomics 201
April, 5 2015
` Hewlett-Packard is the world’s largest technology company, it provides numerous products, software solutions and services to private and business consumers of all sizes. Their customers also includes government, health and education sectors. Their operations are divided into seven different divisions, Hewlett Packard offers products for personal computing, customer services, infrastructure technology, business outsourcing, application development and imaging and printing products.
Hewlett-Packard stretch across numerous information technology markets and have many competitors in each one. HP had a 3.3% market share in the IT market based on industry wide revenue figures for 2012. That year their revenue was about $100 billion dollars which was second only to Apple Inc. that year which had a 3.9% market share and roughly $149 billion dollars’ worth of revenue.
Price elasticity of a product is a change in the quantity demand of a good divided by the change in the price for the good. Hp is a technology and hardware company and consumers have seen a lot of their products in electronic stores. With all the competition that they have in the varies product markets and the ever growing number of new products being developed and released. This create short life cycles for products and with consumers being extremely price sensitive due to the high number of alternatives, this drives a high level of elasticity in the technology sector, that can affect many of HP’s products.
Based on some analysis that has been done so far, the software revenue grew 14% year after year with a 27.2% operating margin. Software revenue was increased by 9% license growth, 9% support growth and a 48% growth in services. Their financial services revenue grew by 1%. There were also declines in other divisions of the company, for example personal
Jason Strawbridge
Microeconomics 201
April, 5 2015
` Hewlett-Packard is the world’s largest technology company, it provides numerous products, software solutions and services to private and business consumers of all sizes. Their customers also includes government, health and education sectors. Their operations are divided into seven different divisions, Hewlett Packard offers products for personal computing, customer services, infrastructure technology, business outsourcing, application development and imaging and printing products.
Hewlett-Packard stretch across numerous information technology markets and have many competitors in each one. HP had a 3.3% market share in the IT market based on industry wide revenue figures for 2012. That year their revenue was about $100 billion dollars which was second only to Apple Inc. that year which had a 3.9% market share and roughly $149 billion dollars’ worth of revenue.
Price elasticity of a product is a change in the quantity demand of a good divided by the change in the price for the good. Hp is a technology and hardware company and consumers have seen a lot of their products in electronic stores. With all the competition that they have in the varies product markets and the ever growing number of new products being developed and released. This create short life cycles for products and with consumers being extremely price sensitive due to the high number of alternatives, this drives a high level of elasticity in the technology sector, that can affect many of HP’s products.
Based on some analysis that has been done so far, the software revenue grew 14% year after year with a 27.2% operating margin. Software revenue was increased by 9% license growth, 9% support growth and a 48% growth in services. Their financial services revenue grew by 1%. There were also declines in other divisions of the company, for example personal