Management Economics Assessment 1 - Describing Apple's Business and Identifying Demand and Market Equilibrium for iPhone

Management Economics
assessment 1

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Describing the business...............................................................................................................1
Identification of demand as well as market equilibrium.............................................................2
Indicating whether demand is more elastic or more inelastic......................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Managerial economics is used by enterprises to primarily solve problem or issues and devise
decisions through application of principles, models and concepts related to economics. It deals
with internal complexities through usage of ample number of theories (Anyushenkova, 2017).
All business forecasting, investments along with assumptions are derived from managerial
economics. It also helps decision makers of enterprise to assess priorities and goals, existing role
and requirements for fill the void. For the project, chosen brand is Apple which is multinational
technology establishment specialised in computer software, online services addition to consumer
electronics. It is most valuable organisation and largest information technology business by
revenue.
The project highlights information about the business. It also includes identification of
demand together with market equilibrium. At last, it indicates whether demand of the company’s
product is more inelastic or elastic.
MAIN BODY
Describing the business
Historical information of company
On April 1, 1976, Steve Wozniak, Ronald Wayne as well as Steve jobs established a
business that is Apple with the mission of bringing best personal computing commodities along
with support people including scientists, students, business persons and many more around the
globe. It is user friendly organisation that started by making computers small enough for
population to have at homes and offices. The first product of the company is Apple I which was
a computer designed along with hand built entirely by Wozniak. Apple I was sold as
motherboard with RAM, CPU as well as other basic textual video chips. In 1977, Apple II was
invented and further in 1980, Apple III was introduced in market. By 2000s, it was leading
computer manufacture in US in which the company recorded sales of around 7 million in the
period. As of now, the company works with employee size of approximate 154000 and revenue
of US $ 274.515 billion.
Products or services of enterprise
Apple is a large technology organisation which sells variant of computer accessories.
Some of its products with sales worldwide are as follows:
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Figure 1: Sales of Apple Products Worldwide. 2021
(Source: Sales of Apple Products Worldwide. 2021)
The graph shows product sales of Apple worldwide by year, starting from 2007 to 20021.
Major products of the company are iPad, MacBooks, iPhone and iPod. In the year 2021, sales of
iPhone include 145.3 million units, iPad is 31.7 million units, Mac is 14.04 million units and
iPod is 0 million units (Sales of Apple Products Worldwide, 2021).
Selection of product
iPhone is one of commodity of Apple that was released in 2007. The product is selected
for the analysis as it is more popular among types of consumers of the company (Ketokivi and
Mahoney, 2017). It has functionality of mobile phone, game console, portable media player
addition to handheld computer in individual device. It is most popular addition to bestselling
product across the globe. With Apple, there are around 33 iterations of iPhone such as iPhone,
iPhone 3Gs, iPhone5, iPhone 5s, iPhone 5c, iPhone 6, iPhone 6 plus, iPhone 7, iPhone7 plus,
iPhone 8, iPhone 8 plus, iPhone X, iPhone XS, iPhone 11, iPhone 13 and many more.
Identification of demand as well as market equilibrium
Demand is refereed to an economic principle that elaborates desire of consumer for buying
a good or service and willing to pay an amount for particular good or service. Analysis of
demand act as basis to devise decision of pricing of a company (Bogdanović, Vetráková and
Filip, 2018). In case, if demand for an item is high, an organisation can charge high price by
keeping other things same. However, if demand for a product is low, it is not possible for an
establishment to charge high price. It helps the establishment in profit budgeting. Similarly,
market equilibrium is defined to a situation in which supply and demand of particular product are
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