Demand Determinants of Reliance Jio and Tomato Prices: A Microeconomic Analysis

Microeconomics 1
MICROECONOMICS
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Microeconomics 2
MICROECONOMICS
What are the demand determinants that Reliance Jio has focused on?
Reliance Jio is a telecommunication company based in India. Reliance Jio is the
most used Internet Service provider in the country and has more than 185000000. Jio is causing
turbulence in the telecom industry, and this is because of its efficiency and effectiveness. The
mobile network has the best offers regarding internet and also calls services (Nair 2017).
Ever since it was launched Jio has managed to gain recognition all over India,
and this is due to the demand determinants that the industry uses. Some of the demand
determinants that Jio uses are as follows.
First, the telecommunication company uses the price determinant. The company
realised that with a change in the prices of their goods and services the demand in the market
also changed. The company gives a four-month trial to all its users meaning the client base can
use the network first for free before deciding to use it fully (Kumar, Balaji, Krishna and Yadav
2018). This has increased their demand as more people are running the test trial. Also, Jio allows
users to make free voice calls to other Jio networks and even to other networks. Reliance Jio also
offers the lowest data plans in India which many users have found useful. Therefore in this
instance, we see that they have managed to increase their demand through price by being easily
affordable.
Second, the mobile network uses the determinant of prices of products that are
related to it. Ever since the launch of Jio, the demand for handsets that are VoLTE enabled has
increased in India. These handsets include those such as Lenovo, Xiaomi, Samsung and
Counterpoint. This is because these handsets allow for the transmission of voice calls as data
while using a 4G network which Jio offers. Also, Jio will impact the online market in India, and

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this is because it provides cheap data and even fast data. Therefore there will be more audio-
visual content in the online market. In this instance, we see that a change in income or
preferences has resulted in a shift in demand (Kaur 2018).
Lastly, the mobile network uses the determinant of expectation. Ever since its
launch, more and more Indians are using the network, and the client base is expecting more from
the company. Jio has just launched its new data plan, and the users cannot wait to see what more
the company has to offer (Agarwal, 2017). The users are expecting more data plan offers and
merging with other mobile network companies to provide better quality services. Therefore the
expectation in the client base also has a change in the demand.
Explain the concept of cross-price elasticity of demand with respect to clash in telecom
sector companies.
Cross-price elasticity is whereby a change in the price of a good affects the
demand of another related good. For example, if the price of data plans by Jio is cheap then how
has this affected the demand for other mobile networks such as Airtel and Idea (Haq 2017).
Ever since the launch of Jio, the mobile network has managed to score close to
16million subscribers in the country. The network just recently announced its data plans and they
were cheap and affordable. This caused other network companies to have to cut down on their
tariffs by 80 percent. Airtel was the first to slash of their prepaid tariffs, and other networks
followed. In this instance, we see that once the price of the data plans of Jio went down, then the
demand for the mobile network went up. This affected other mobile networks in that their
demand went down because most of the users preferred the data plan that Jio offered. The other
networks hat to cut down on their prices as well so that they could not lose their demand
(Chinthala, Madhur and Kumar 2017).

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Also, the price of the goods and services that Reliance Jio offers has had an
adverse effect on the balance sheets of other mobile network companies. Airtel for example, after
cutting down on the data tariffs has had a 4.9 percent decline in their profits in Q2. The company
was however lucky because, despite their declines in profit, they had a 24 percent increase in the
data revenue. Idea was however not fortunate because they witnessed a decrease of 24 percent in
the data revenue. Since Jio made its voice calls free, the other mobile networks are resisting
doing this, but they could make calls over the VoLTE networks free (Mahalaxmi and Kumar
2017).
Reliance Jio has also affected the sales of VoLTE enabled handsets in the
country. With its fast and cheap data plans, more Indians are buying VoLTE enabled handsets
that allow one to transmit voice calls as data over a 4G network. In this instance, we see that the
affordable prices for the 4G data that Jio offers have had a positive effect on the demand for
handsets that are VoLTE enabled. The demand for such handsets has increased in the country.
Amazon Fire TV Stick Introduction in the market.
The Amazon Fire TV Stick is a digital media player that is designed to stream
digital audio and video to television at high definition. The media player is simply an
entertainment device that was developed by Amazon. The media player also allows one to play
video games on a mobile app or via a video game controller. The Fire TV Stick is a smaller
version of the Fire TV. It does everything that the Fire TV does, but it has different hardware
(James 2016).
The Fire TV Stick has a 1GB RAM, 8GB storage, is 25.1g and it uses two
processers which are Broadcom BCM28155 dual-core 1.0 GHz Cortex-A9 processor and a
Broadcom VideoCore IV GPU. The Fire TV Stick has two remotes where one has a voice search