Question

Examine Apple

Describe the firm’s technology, costs, whether the firm is competitive, oligopolistic, or monopolistic. Also explain how those factors influence the firm’s price and output. Discuss in terms of supply and demand, elasticity, efficiency, price discrimination, strategic interaction, or other economic concepts.

Furthermore, determine whether the business should produce more of their good or service or if it should focus on cutting costs and if it should consolidate its locations or spread out.

Answer 1

Apple offers various products like smart TV, Mac Book, iPods, iPhones etc.

Most preferred product is iPhones.

Apple has it's own customized hardware and software.

The tech gadgets has the latest technology making them faster, efficient and reliable.

Apple is an oligopoly in the market as there are few other competitors in the market and it is too costly for any other rivals to enter in the market.

Apple uses minimum advertised price retail strategy.

It makes short run output and price decisions when other firms are getting ready to release a new product.

Apple also practices price discrimination where it sells many versions of products according to the needs and purchasing ability of their customers.

It increases it's profits by manufacturing in low cost locations where labor is cheaper. This reduces the cost of production for Apple and helps in increasing the supply and thereby the profits.

The brand image of the Apple is too good that the company is able to sell it's products even at a higher price and the demand is always high for the products.

Since, not many close substitutes are available having iOS technology, the demand is considered to be inelastic. The company can raise prices of their new products without seeing a drop in demand.

Since the demand for Apple products is worldwide, it can spread out.