preview

Micro Economic Analysis Paper

Good Essays

Microeconomic analysis of iMac Veronica Ionescu Southern New Hampshire University Introduction Microeconomics is analysis of individual firm or market and their price mechanism. iMacs and their price mechanism would be analyzed in this paper. Supply and demand determine the price of iMacs. There are many important factors that must be taken into consideration when a decision is made about producing the iMac. Some of the factors are: demand and supply, price mechanism, the analysis of production costs, the importance of market structure, trade and the competitiveness in the global economy. Abstract My individual microeconomic analysis paper should respond to the following prompt: Assess how microeconomic variables impact (1) your …show more content…

Availability of substitutes is the most important factor. Apple is producing high quality products and people like to buy quality products. Customer income is one of the most important things. The high price of iMacs makes them less accessible and only a certain category of people can afford to buy. When people’s income is increasing the demand for goods, products and services will increase and vice versa. Advertising plays an important role in brand loyalty. Taste it’s another important factor that is affecting demand elasticity. Example, some people like Apple, some people like Sony, Samsung, HP or …show more content…

When prices are higher the demand decreases and the supply increases and vice versa. The market is in equilibrium when supply and demand curves intersect. If the quantity of iMacs demanded and quantity supplied are equal the market is in equilibrium. The price where the supply and demand curves intersect is the equilibrium price or market clearing price. If the market price of iMac is above the equilibrium price, quantity supplied is greater than quantity demanded, creating a surplus. The price will decrease. Example: if Apple have a lot of iMac inventory that cannot sell we need to decrease the price, the iMac quantity demanded will increase until equilibrium is reached. When the market priced is below the equilibrium price, quantity supplied is lees then quantity demanded, we have a shortage. Market price will increase because of this shortage. Example: iMac is always out of stock, raising the price of iMac the iMac’s quantity demanded will drop until equilibrium is reached. Apple is a fierce competitor in several industries, ranging from personal computers to entertainment media to mobile payment systems.

Get Access