Elasticity
Walmart drops iPhone 5 price to $129,
4S for $39
The price of the
iPhone 5 is offering in the Walmart in the lowest prices, only $129 and the
retail giant is also offering the iPhone 4S for under $40. By doing this, it
can attract more customer to buy their product according to the concept of
elasticity.
Mobile phone has
numerous competitors. Due to the high range of substitution iPhone tent to has
a higher elasticity. The higher the level of brand, the product is more
elastic. Besides, iPhone 5 knows as a luxury product which tent to have an
elastic demand.
Elasticity is used
to measure of the responsiveness of people to changes in economic variables.
When the price of iPhone5 splashed from
$189 to $129 the quantity demand of the customer will increases because
it has elastic demand for the iPhone.
Owing to
determinants of elasticity the price of the iPhone is very expensive compare to
others hand phone, so iPhone are more elastic compare to others.
iPhone contain
mobile phone internet and music downloading capability. Some people like to buy
iPhone due to Apple’s music download platform knows as iTunes. However, iPhone
have a close substitution know as iPod. Hence, the elasticity will become more
elastic due to substitution effect.
By and large, the
marketer can play around with the price of iPhone to increase or decrease the
quantity demand of the iPhone as the percentage change in quantity demanded
that result from 1percent change in price.
List of reference:
http://www.theblogpaper.co.uk/article/business/31may09/price-elasticity-demand-iphone
what is the competitor of iphone?
ReplyDeletesamsung is the competitor of iphone
ReplyDeleteGood explanation. Just want to ask that why the price splased the quantity demand will increase?
ReplyDeleteWhen the price decreases, the quantity demanded will increases.This is because it is fairly elastic demand.
Deletewhat is the substitute of iphone?
ReplyDeleteAndroid such as SAMSUNG
Delete