I would say that when I think of a company that has inelastic demand on their products it would have to be Apple. Apple charges above average prices for their phones, computers and music players all with the marketing strategy of superior quality. When a company achieves inelastic demand it is because of two possible reasons. They have either developed highly differentiated products or brands or they have achieved a monopoly on a market or product category. (Tedesco, 2011) If you look at Apple they have a combination of both. You wouldn’t necessarily label Apple as a monopoly but they do possess a large amount of influence on how other tech companies develop their products. This is shown in various lawsuits that have been brought by Apple against other tech companies for patent violations. Apple has however developed superior products in comparison to others. Apple has marketed their high-end electronic devices to the point that they can introduce similar devices every few months and make people think that they are improved enough over the older models to constitute a needed upgrade. The marketing is brilliant. If I was talking to the president of Apple about what their pricing strategies should be I would bring up the possibility of a downgraded model to reach the customer base who can’t afford $600 every few months for a new phone or tablet. Even though Apple has monopolized on the higher income customer base they have untapped potential in the lower to middle income customer base. Cell phones are deemed as a necessity by many and if the price is right most consumers will spend the money on a product that is considered superior to others in the marketplace. While researching different articles for this assignment I came across an article about the elastic demand of sports tickets, especially Super Bowl tickets. When I was trying to think of a company with elastic demand, the NFL never crossed my mind but the NFL is a profit generating entity. The article...
Bibliography: Rishe, P. (2013, September 19). SuperBowl XLVIII Pricing: A Lesson In Demand Elasticity. Retrieved September 27, 2014, from Forbes.com: http://www.forbes.com/sites/prishe/2013/09/19/super-bowl-xlviii-pricing-a-lesson-in-demand-elasticity/
Tedesco, T. (2011, May 20). View from Mount Olympus. Retrieved September 26, 2014, from piworld.com: http://www.piworld.com/blog/inelasticity-demand-your-printing-services-pricing-strategy-tj-tedesco
Tucker, I. B. (2013). Survey of Economics (8th ed.). Mason, Ohio, United States of America.
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