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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. http://www.mediafire.com/file/k35674a7t1i04 d9/project%20A.wmv Project B Japan Economy Deficit iPad 2 Japan Economy Deficit DUE TO RESULTS IN (PRODUCERS) quantity and quality of resources Negative growth, lower output reduction in supply RESULTS IN Unemployment, decrease in income, loss of homes (CONSUMERS) Purchasing power Fall in demand More consumers rationed out of market (rationing function) More consumers unwilling and unable to purchase iPad Effects on Marketing & Pricing Decisions fall in quantity supplied > fall in quantity demanded** **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. Equilibrium point at which the demand and supply curve meets will shift leftwards, allowing us to conclude that the price will increases. Introduction of iPad 2 (CONSUMERS) Assumption: Consumers prefer substitution goods such as the iPad 2 since it is newer and better than the ipad Demand for iPad would decrease Introduction of iPad 2 (PRODUCERS) Due to fall in demand for iPad, producers channel resources to the production of the iPad 2 instead of iPad Decrease in quantity supplied of iPads Effects on Marketing & Pricing Decisions Fall in Demand > Fall in Supply** **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 According to the curve, the equilibrium point will move leftwards , allowing us to conclude that the equilibrium price decreases. Credits www.businessinsider.com/japan-supply-chain-20111-3