Gp2


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 * PROJECT A || iPad first originated in US on 3 April 2010. The price of iPad is determined by the demand and supply forces in the market economy. The decisions of producers determine the supply while the decisions of buyers determine the demand. It is the interaction of demand and supply that determines the market prices of good and services. Market equilibrium occurs at a price where quantity demanded is equals to the quantity supplied. When the market is in equilibrium, there is no tendency for the price or output to change. However, with its increasing popularity among consumers, iPad is considered as a luxury good. Hence, it is relatively price elastic because the change in price of good will cause the change in the quantity demanded to be more than proportionate. As producers' objective is to maximise their profits, they will increase the price to earn more profits.

There are related products of iPad and examples are iPad Camera Connecting Kit, Apple VGA Adapter, Apple Coamposite AV Cable, iPad Smart Cover, iCade and the iPad mixer. All these are complimentary products of iPad. The iPad Camera Connecting Kit allows photos and videos to be imported from a digital camera to the iPad via USB Cable or SD Card. The Apple VGA Adapter and the Apple Coaposite AV Cable connects the iPad to a larger screen such as a television, monitor, projector or a LCD display using a VGA Connector to enlarge what is shown on the screen of the iPad. The iPad Smart Cover protects the screen of the iPad from getting physical damages such as scratches. It can also be folded in a way that allows the iPad to stay in different positions. The iCade allows the iPad to transform into a mini arcade, enhancing the joy of playing iPad games and the iPad mixer allows one to mix music at a professional level.

Sources : Wikipedia- IPAD, 18 march 2011 [] Apple official website- Ipad Must-Have. And Fun To Have. 2011 [] Global Market Creative Ipad related Products, 04 March 2011 __ [] __ || gd!

Factors affecting price elasticity of demand are not explained; only stated definition of price elastic demand. || When products, such as the Samsung Galaxy Tab and the Windows Phone 7, which have almost the same function and technology as the Ipad is out in the market, at the same time have a lower price, consumers would want to switch to these cheaper products. These are substitutes of the Ipad as they satisfy the same wants and needs of the people. As consumers switch to cheaper substitutes, it will cause the demand for Ipad to decrease and that of its competitors to increase. This will cause the price of the Apple Ipad to drop since consumers signal their preference to the producers of apple Ipad through the demand. On seeing that they are losing their customers, Apple will try to lower its price in order to get back their customers. When Apple lower their price, customers will think about buying the Ipad as it is usually very expensive, allowing Apple to get back some of its customers. Moreover, Apple can also research and find ways to improve their Ipad so that people will still buy their Ipad despite the competitors’ products which are slightly cheaper that the Ipad. Recently, there are many new products that are said to be the new prototype of Apple’s Ipad and this upcoming competition means that the Ipad is not going to be the only tablet PC in town. Apple is a recognized global brand. Hence, some people are more confident and comfortable with the use of Apple. Apple has created a product with unique selling points like its touch capability. Hence, even if cheaper substitutes were being introduced into the market, some consumers would not turn to it since they prefer apple products due to the goodwill Apple products have. Due to the consumer’s taste, the demand for apple Ipad will not be affected and the price for apple Ipad will remain firm. Although Ipad has lots of competitors, it has an advantage over the rest as it has started earlier than the rest. Hence, it knows the needs of the market better than the rest. The price of Ipad should not be lowered as Ipad is still in trend(PED?). When Ipad is still a relatively more favorable choice to consumers than its substitutes, consumers are more willing to purchase Ipad although it is more expensive. In this case, Ipad is considered more of a normal good than a luxury good, in developed countries such as Singapore. Therefore, its demand is more price inelastic(? factors). Any change in the price will be more likely to result in a less than proportionate change in quantity demanded. Therefore, even when the producers decide to increase the price of Ipad, the total revenue generated is still greater than when they decrease the price(Why?).
 * PROJECT B || Apple Ipad may be the first tablet PC in the world. However, due to its success, other competitors, substitutes of Ipad, arose. These new inventions have brought about different reactions to both the consumers and producers of the apple Ipad.

However, the adjustment of the price of Ipad should be considered based on the economic situation of each country, how much income the majority and minority groups of each country earn and how fast the new technology arrives at the country.

Sources: Mobilized-Apple’s Second iPad Hits the Market, While Most Rivals Haven’t Shipped Their First Tablet by Ina Fried, 11 March 2011 [] || ﻿whether Apple should lower price or not depends on PED. explain.

Gd example of marketing strategy. Can you state clearly the impact on Dd for Ipad if the marketing decision is successful?

How about factors from producer's view?

Overall, good attempt at addressing the price & marketing decisions. However, inaccurate understanding of the PED concept is present.

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 * PRESENTATION MATERIALS || [[file:ECONS GP2.pptx]] ||  ||