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Economics Project B

Economics Project B. By: Glen, Ding Zhan, Jun Jie , Rhine, Zhan Kuan . Group 4. Overview of iPad 2. Apple’s iPad 2. iPad (1) vs iPad 2. Table 1.1. Viewpoints.

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Economics Project B

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  1. Economics Project B By: Glen, Ding Zhan, Jun Jie, Rhine, Zhan Kuan. Group 4

  2. Overview of iPad 2 • Apple’s iPad2

  3. iPad(1) vsiPad 2 Table 1.1

  4. Viewpoints • As you can see from Table 1.1, the new iPad 2 is a great improvement from the older iPad. • iPad2’s entry price in the market is £439 for the 16GB Wi-Fi model, and it is the same as the price of the original iPad. • Judging from this, let’s look at 2 different viewpoints  consumers and producers.

  5. Consumers Demand of iPad2 • Since the price of the iPad 2 is the same as the iPad(1), many would consider buyingiPad 2 over the previous iPad becauseit is newer and improved. • Hence, the quantity demanded of iPad 2 will rise, and that of iPad(1) would decrease. • For example, many iPad(1) owners are selling their iPads online in order to purchase the newer iPad 2. X Price is constant. Demand of iPad(1)

  6. Consumers • Furthermore, due to the advancement of technology, and the rise of many software giants, many other alternatives are released in the market. • Examples are: Samsung Galaxy Tab Motorola Xoom Dell Streak

  7. Consumers • Hence, as more consumers turn to alternatives, due to brand preference or better technical specifications, the demand for iPad would drop. • Furthermore, if the prices of the alternatives are cheaper, it would lead to an increase in the demand of these goods, while the demand of iPad would fall.

  8. Producers • Since the price of the iPad 2 is the same as the iPad(1), the price of the original iPadwould have to be lowered in order to attract customers to buy it. • This reduces profit per unit cost, which would not spur producers to actively produce more goods. • Thus, the supply of iPad would fall.

  9. Producers Resources(from Japan) • In addition, severalkey components in the iPadcomes from Japan. • TheiPad battery is manufactured by Apple Japan. • With Japan’s economy in tatters, due to the recent earthquake/tsunami, Apple may have difficulty obtaining batteries from Japan. • With lesser resources, production capabilities are impaired, leading to a fall in supply of iPads. R2 R1 S1 S2 Supply of iPads

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