Economics project Done by: Jasmine Quek Serene Quek Vanessa Lim Rachel Lee Wee Hong Yi

Project A Take a look at our video that we had made to understand how the price of ipad is determined. d9/project%20A.wmv

Project B

Japan Economy Deficit iPad 2

Japan Economy Deficit DUE TO TSUNAMI/EARTHQUAKE

RESULTS IN reduction in supply quantity and quality of resources Negative growth, lower output (PRODUCERS)

RESULTS IN Purchasing power Unemployment, decrease in income, loss of homes More consumers unwilling and unable to purchase iPad (CONSUMERS) More consumers rationed out of market (rationing function) Fall in demand

Effects on Marketing & Pricing Decisions fall in quantity supplied > fall in quantity demanded** Equilibrium point at which the demand and supply curve meets will shift leftwards, allowing us to conclude that the price will increases. **Although the Japanese may not be as willing to buy iPad due to their situation, people from all over the world would still want to buy the iPad, the demand for iPad would therefore not be greatly affected as compared to the quantity supplied.

Introduction of iPad 2 Demand for iPad would decrease Assumption: Consumers prefer substitution goods such as the iPad 2 since it is newer and better than the ipad (CONSUMERS)

Introduction of iPad 2 Decrease in quantity supplied of iPads Due to fall in demand for iPad, producers channel resources to the production of the iPad 2 instead of iPad (PRODUCERS)

Effects on Marketing & Pricing Decisions Fall in Demand > Fall in Supply** According to the curve, the equilibrium point will move leftwards, allowing us to conclude that the equilibrium price decreases. **According to the Marginalist Principle, it would be rational for consumers to purchase substitution goods (iPad 2) than the iPad. This is due to the fact that the satisfaction gained from consuming an additional iPad < cost paid for that additional iPad. Thus, fall in demand would be greater than fall in supply

Credits