Management Economics: Demand and Market Equilibrium of Apple Handset

Management economics

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Introduction of the product..........................................................................................................1
Identifying Demand and Market Equilibrium.............................................................................1
Identifying factors that influence the Price Elasticity of Demand...............................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Economics management is the study of analysing how resources, finances, spending and
income of an organisation, individual or a nation is managed to utilise it in contingent situations
(Davidson and et. al., 2012). The main aim of this report is to develop an understanding about
the concepts of economics and how it impacts demand and supply of a product. In the present
report a product range of “Apple handset” is selected which is analysed using identifying its
demand and market equilibrium. Later in this report, factors are identified which impacts price
elasticity of demand.
MAIN BODY
Introduction of the product
The product which is selected for understanding the concept of economics management is
Apple handset. Apple is an information technology company which was founded by Steve Jobs
in April 1976. This company deals in variety of product range such as handsets, music etc. Apple
handset covers a total of 66% of entire industry profits. The rationale behind selecting this
product range is its easy accessibility to the information regarding the demand and supply of this
product.
Identifying Demand and Market Equilibrium
 Price of substitutes – There are various substitutes of Apple handset but this product is
considered as a market leader (De Vos, 2012). Few substitutes of this product are
Samsung Galaxy, Huawei, Google Pixel and many more. In order to be competitive and
maintain a position in the market, the substitute companies of Apple handset has reduced
the prices of their products. This act of the substitute organisation has resulted in
decreasing demand for Apple handset.
 Price of complements – There are various complement products of Apple handset which
are created by Apple Inc. These complimentary products include Apple Watch, Apple
Airpods, Airprint, Airplay and many more. In this contemporary world, technology plays
an essential role in an individual life. Due to the current world dynamics, the prices and
demand for complementary goods has raised. This has resulted in price increase of Apple
handset as by the complementary goods; consumers enjoy an enhanced experience of the
technology. In order to evidence this situation, the increased price of every newly
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