Sunday, 7 July 2013

About Elasticity


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


6 comments:

  1. what is the competitor of iphone?

    ReplyDelete
  2. samsung is the competitor of iphone

    ReplyDelete
  3. Good explanation. Just want to ask that why the price splased the quantity demand will increase?

    ReplyDelete
    Replies
    1. When the price decreases, the quantity demanded will increases.This is because it is fairly elastic demand.

      Delete