Transcript Economics Webquest

Economics Webquest
A project done by Charlene Wee, Le Ngoc Mai, Seah Qian Yi, Soh Qian
Wei, Gan Chin Boon, Huo Yong Hao & Lee Zheng Rong of 11S101
When did the iPad first originate?
First tablet PC by Apple: Newton
MessagePad 100
 Several more Newton-based PDAs,
including MessagePad 2100 developed
before release of iPad

How is the price of iPad determined?
Adam Smith’s ‘Invisible Hand’
 Consumer and producer decisions
result in a final price where quantity
supplied = quantity demanded (Market
equilibrium)
 Rationing and signaling function
 Determined through demand and supply
for iPad

Related/Associated Products with iPad
Samsung Galaxy Tab & Motorola Xoom
 Serve same function and offer similar
features
 Imperfect substitutes

Recent Developments Affecting
Marketing and Pricing Decisions
for iPad
Anti-iPad campaign by Microsoft
 Introduction of increased numbers of
Android tablet computers
 As imperfect substitutes, they provide
consumers with a wider range of
products to choose from

Consumer’s Point of View:
Increased Competition
Presence of more tablet computers
increases choice
 Increases number of substitutes,
making iPad more price elastic
 Signaling function results in drop in
price of iPad

Consumer’s Point of View:
Microsoft Anti-iPad Campaign
Weaknesses of iPad highlighted
 Results in firms deferring purchase or
preferring substitutes over iPad
 Demand curve shifted to the left
 Market equilibrium at lower price and
quantity due to signaling function

Producer’s Point of View:
Increased Competition
Apple may improve iPad to increase
customer preference
 Distinguishes iPad from competitors,
making substitutes more imperfect
 Demand for iPad more price inelastic
 Signaling function would result in
increase in price

Producer’s Point of View:
Microsoft Anti-iPad Campaign
Apple has to address problems to
increase customer preference
 Prices decrease due to drop in demand
 Signaling function would result in drop
in price to market equilibrium to
maximise profits

Conclusion
Recent developments would affect price
at which iPad is now set
 Through better marketing, the problem
can be countered allowing an increase
in price to maximise profits
