Running Head: MBA 502 FINAL PROJECT PART 1MBA 502 Final Project Part 1Southern New Hampshire UniversityJanuary 24, 2021Overview
MBA 502 FINAL PROJECT PART 1In April of 1976 Apple was founded by Steve Jobs, Steve Wozniak and Ronald Wayne and isconsidered one of the Big Five companies in the U.S. Apple Inc is an American based,multinational technology company with around 137,000 employees. It is headquartered inCupertino, California and designs, develops and sells electronics, computer software andmultiple online services (Apple Inc, 2020). Apple’s products include the iPhone, iPad, MacBook,AirPods, Apple Watch smartwatch, and more. With all of the products and different software thatApple sells, in 2020 their annual revenue was about 274.52 billion dollars (Apple Inc, 2002).In this microeconomic analysis the AirPods will be examined. AirPods are a wireless,Bluetooth earbud that Apple created. They were first released in 2016 and since the AirPod Proand Max have been released.Supply, Demand and Market EquilibriumElasticityPrice elasticity is all about responsiveness to a product. Price elasticity of demand examinesthe percentage change in quantity demanded in response to a percentage change in price (Miller,2018). Due to the popularity of AirPods, the price elasticity of demand does play a significantrole in this product. If Apple were to increase the price of AirPods, the quantity demanded isexpected to decrease as consumers are not willing to pay an increased price. When calculatingthe price elasticity of a product an assumption to keep in mind is the Ceteris Paribus Assumption,which holds factors constant to look at the relationship between changes in price and changes inhow much of a given product consumers will purchase (Miller, 2018). This is important for priceelasticity of demand because of the popularity of AirPods. This assumption allows consumers tocompare prices to identify which products to purchase.Nonprice Factors: Demand2
MBA 502 FINAL PROJECT PART 1Marketing or advertising is one nonprice factor that heavily affects the demand ofAirPods. Social media influencers play a large role in advertising for all companies. When apopular influencer is wearing AirPods, their following has the drive to look like their favoriteinfluencer. This nonprice factor will increase the demand of AirPod, while the price of theproduct has no influence on how many people will purchase the product.Another nonprice factor that will affect the demand of AirPods is the branding on theproduct. Due to Apple already being such a large company, whenever anyone sees the Applelogo, they know the product they are purchasing is the highest quality on the market. This factorwill most likely always increase the demand for the product, because people know that whenthey purchase a device with the Apple logo, they will want to purchase more withoutacknowledging the price tag that comes along with it.
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