Business Economics of Apple Assignment

Running head: BUSINESS ECONOMICS
BUSINESS ECONOMICS
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Running head: BUSINESS ECONOMICS
Table of Contents
1. Introduction..................................................................................................................................2
2. Analysis and Discussion..............................................................................................................3
Question 1: Effectiveness of price elasticity of demand for Apple with respect to product
launch...........................................................................................................................................3
Question 2: Factors affecting the price elasticity of demand for Apple......................................3
Question 3:...................................................................................................................................4
Question 4:...................................................................................................................................5
Question 5:...................................................................................................................................5
Question 6:...................................................................................................................................5
Question 7:...................................................................................................................................6
3. Conclusion...................................................................................................................................7

Running head: BUSINESS ECONOMICS
1. Introduction
The paper deals in the study of microeconomic and macroeconomic concepts in relation
to various situations that might affect the overall market operations in correspondence to the core
economic principles. The economic principles help to evaluate how change in strategies can
affect businesses and market functioning hugely. For microeconomic analysis, a case study of
apple has been shown where it has changed its pricing strategy in order to grab the market
demand and raise sale of the product. Microeconomics mainly deals with problems relating to
behavior of individuals or firms with effective allocation of scarce resources. The case has been
evaluated with elasticity, price change, competitive markets and marketing strategies that
improve the revenue structure of the firms. For macroeconomic analysis, an analysis of roaming
charges has been taken, where the bill amount and benefits vary from country to country.
Macroeconomics studies the performance of economies and how change in decisions affects the
world market and consumers.
2. Analysis and Discussion
Question 1: Effectiveness of price elasticity of demand for Apple with respect to product
launch
The price elasticity of demand helps to evaluate to degree of responsiveness of a price
change with respect to a change in the quantity demanded. Goods are said to be elastic if change
in quantity demanded is more than the price change. Apple follows a high price strategy due to
unavailability of close substitutes. This is because when price of a good goes up that has many
substitutes, then demand falls hugely as consumers shift their preference for other products.
Therefore, it becomes important for Apple to estimate the price elasticity of demand before
launching the product in the market place. Apple has been following a high price structure due to