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IPADS What is a iPad? - It’s a 9.7-inch tablet computer that fits in between the iPhone smartphone and the MacBook computer. Functions: Web browsing E-mail Photos Video Music Games Ebooks So WHEN did ipad first originate? The first generation of ipad is released on 3rd April 2010 and the second generation of ipad is released on 11th March 2011 How is the price determined? The price of iPad is determined by 2 factors – market demand and supply by price mechanism. Demand exceeds supply ↓ Upward pressure on price ↓ Quantity demanded falls ↓ Equilibrium price What are some of the related/ associated products for iPad? How are these products related to the ipad? Due to high demand for ipad ↓ Production of products related to ipad (complements) - Ipad cover Ipad briefcase ↓ Production of products similar to ipad (substitutes) - Samsung galaxy tab Blackberry playbook Elasticity Due to developments that affect the standard of living in major countries Income has increased Affecting their choice and taste of goods People has become more techsavvy & affluent Increased demand for luxury goods (E.g. iPads) Making the iPad income elastic YED>0 Pricing the iPad Due to media advertising, iPad has become highly popular and has made the demand for the iPad price inelastic. Hence price of iPads can be increased without much decrease in its quantity demanded. In the above figure, when price increases from P2 to P1 , there is a less than proportionate decrease from Q2 to Q1 in the quantity demanded. When pricing the iPads, the producers will naturally increase the price of the iPads in order to maximize profits. Comparison Samsung Galaxy Tablet iPad Amazon Kindle Other products(substitutes) pale in comparison when compared to the iPad. Therefore, if price of the substitutes decrease, there would be a less than proportionate decrease in the quantity demanded of the iPad. This shows that the iPad is cross inelastic. Conclusion The price of the iPad is highly priced as compared with its original cost of production. Yet consumers are still willing to pay for it. (High Demand) Therefore due to the law of scarcity, there is upwards pressure on the price, where price equilibrium is the current price of the iPad.