Factors Influencing Demand and Price Elasticity of Boeing Products

MANAGEMENT ECONOMICS - 1

Table of Contents
1. Description or background of company..................................................................................3
2. Determine demand and the market equilibrium along with the factors that influence demand
of the product and services..........................................................................................................3
3. factors influencing price elasticity of the demand..................................................................5
REFERENCES ...............................................................................................................................8

1. Description or background of company
Boeing is world's leading aerospace company and the foremost manufacturer of the
commercial Air transportation. It is the largest producer of the military aircraft, space vehicles,
missiles, helicopters standing significantly with firm's acquisition of aerospace & defensive units
of the Rockwell multinational corporation in year 1996 and its respective merger with the
McDonnell Douglas company in year 1997. Formally Boeing company assumed its present name
in the period 1961 for reflecting its expansion in fields beyond the manufacturing of aircraft. Its
headquarters were in the Seattle since 2001, when the company is being relocated into Chicago.
Company was founded by the founder William E. Boeing in the year 1916. Turnover of the
company was 7,656 Cr. USD in 2019. Current CEO of Boeing is Dave Calhoun. Company
generally has 161133 number of employee in the organization. They generally used to help the
company in carrying out the different activity way smoothly in the organization in the long run.
The company's constituent units of business are been organized across 3 group of the service &
products that includes military aircraft, commercial air-planes, communications & space. The
company produces 7 different families of the commercial aircraft that are been assembled in two
facilities that is Everett & Renton in the Washington district and in California. Boeing business
aircraft, a joint venture of firm with the general electrical company which makes & market the
business jets on the basis of 737 to 700 airliner along with VIP versions of 747,777 and the 787
airlines. Boeing have varieties of different sort of subsidies in general namely Aviall Inc., Boeing
Commercial Airplane etc.
2. Determine demand and the market equilibrium along with the factors that influence demand of
the product and services
There are various factors that influence the demand of particular product & services of
the company that are as follows-
Price of the substitutes- It means as the product that could be used in place of other for
satisfying the wants of customers. The substitute product for Aircraft is helicopter which states
that increase in the price of Aircraft results to rise in demand for helicopter (Henchion and et.al.,
2017). However, decrease in price of airline ticket, demand for travelling through helicopter will
decline. So from the example it is clear that price of substitute product shares the positive
relationship with the demand of the product hence price of substitute product used to bring good
sort of impact on the demand of different product of the company in the long run.