FIN 370 Week 3 Learning Team Assignment

Topics: Supply and demand, Apple Inc., Elasticity Pages: 8 (1666 words) Published: April 16, 2014


Learning Team: Current Market Conditions Competitive Analysis Tina Beauro, Nerkeda Butler and Laninga Spencer
ECO/365
December 4, 2013
H. Todd Young

Learning Team: Current Market Conditions Competitive Analysis This paper will give a short history and descriptions of Apple’s I Pad minicomputer. It will also give factors that affect demand, supply, and equilibrium prices in the market. Issues that Apple faces that affect its competitiveness will also be addressed. Lastly, this paper will identify the long term profitability of the iPad including, price elasticity of demand, technological innovation, and cost structure. Steven Jobs and Steven Wozniak were friends in high school, which shared like interested in electronics. They designed what would become the Apple and on April 1, 1976, Apple Computer was born. This is an American based company located in California. Apple specializes in design advancing, and the sales electronics, computer software, and computers. Apple is accredited for some of the most popular products of the modern world of technology such as: iPod, iPhone, iPad, and iTunes. Apple has expanded its retail stores to fourteen countries worldwide with 408 retail store not to mention their online stores, Apple Store and iTunes. Apple’s value as of March 2013 is $415 million, and it is the largest most publicly traded companies. The iPad is a tablet designed minicomputer that was released in 2010 by Apple. This device has equipped with Wi-Fi and has a multi- touch screen. There are five different versions of this particular tablet. Each has the capability to play music, record videos, a camera function, browsing the web, e-mailing. Games, GPS navigation system, and social networking can also be downloaded to the device. A market is as a collection of consumers and retailers of a specific merchandise or service. Demand is the actual volume that consumers are prepared and able to obtain. Quantity necessitated is the demand at a specific amount and is symbolized as the demand curve. The supply of a product is the quantity that manufacturers are prepared and capable to convey to the market the sale of the product. The market can be analyzed by matching the supply and demand curve. Equilibrium is the connection of supply and demand curves. The equilibrium amount is the amount where the number demanded matches the number supplied. A change in price does not necessarily mean that the demand will change. It is more likely for the quantity demanded will affect the price. If the price is changed the curve will move along the demand curve. When the price is reduced the quantity demand will be increased. When the IPad was released, it was the only product in that market at that time. Therefore, at that time it absolutely controlled the tablet division. Some corporations tried to contend with Apple, but recognized their position just could not compete. The competition combated Apple by creating smaller tablet that is an unfamiliar place for Apple. This creation worked and caused Apple to lose sales. The competitors rapidly established their place in the market. Price elasticity of demand is an issue that our organization, Apple faces that affects our competitiveness and long-term profitability with regards to the iPad. “Price elasticity of demand and supply tells us exactly how quantity responds to a change in price. As elasticity increases, quantity responds more to price changes. Demand or supply is elastic, if the percentage change in quantity is greater than the percentage change in price”(University Of Phoenix, 2010, pp. 154-157). After reviewing data, specifically targeted to the three types of iPads; their pricing, capabilities and memory storage, it was determined that if the price of the iPads increased; then the consumers may not purchase them ("What Is An Apple Ipad’s Elasticity Of Demand?", 2012). The price elasticity of demand tells us that although apple is very technological...


References: Duhigg, C., & Barboza, D. (2012, January 25). In, China, Human Cost Are Built Into an IPad, p. The iEconomy.
Internal Factors: Costs . (n.d.). Retrieved from http://www.knowthis.com/pricing-decisions/internal- factors-costs
Reisinger, D. (2013, October 22). IPad 2 Survives iPad Air, Still cost $399. CNET, p. .
University Of Phoenix. (2010). Economics, Eight Edition. Retrieved from University Of Phoenix, ECO365 website.
What is an Apple iPad’s Elasticity of Demand?. (2012). Retrieved from http://applecoeconomics.wordpress.com/2012/05/17/what-is-an-apple-ipads-elasticity-of-demand-9/
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