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Economics and Management Decisions-UPES-1-J13

Economics and Management Decisions-UPES-1-J13

Section A

  1. Marginal Utility
  2. Income Elasticity of Demand
  3. Role of Managerial Economics
  4. Trend Projection Method
  5. Economies of Scale

Section B


  1. Discuss the approaches to consumer demand analysis.
  2. Describe the various methods for surveying the consumer.
  3. Make a list of differences in complimentary goods and substitutes goods.
  4. “Elasticity of supply is the degree of responsiveness of quantity supplied to a given change in price”. Explain this definition.


Section C


(Attempt all questions. Every question carries 10 marks)


Read the case “Apple Inc.” and answer the following questions:


Case Study: Apple Inc.


In 2010, Apple had to delay the international launch of its iPad computer for a month, blaming ‘surprisingly strong US demand’ that was higher than the company’s ability to produce them. More than 500,000 were delivered to retailers and customers in its ?rst week on sale, but these soon sold out. The company had planned to launch the touch-screen device internationally at the end of April, after beginning sales in the USA on 3 April. But the strong demand meant that it could not hit that date.

The company said in a statement: ‘We will announce international pricing and begin taking online preorders on Monday, May 10. We know that many international customers waiting to buy an iPad will be disappointed by this news, but we hope they will be pleased to learn the reason—the iPad is a runaway success in the US thus far.’

The news was a disappointment to thousands of people outside the USA who wanted to get the machines as soon as possible.

The iPad is a touch-screen computer with a 9.7-inch screen, which uses the same operating system as Apple’s iPhone and iPod Touch. It comes in two basic models: one with Wi-Fi wireless Internet connectivity and another with both Wi-Fi and 3G mobile connectivity.

Although Apple announced the iPad in January and gave US pricing at the time—starting from $499 for the cheapest model—it repeatedly declined to give any guidance about international prices. That may be to give it room for manoeuvre and to let it raise the price of non-US versions to control demand.

The USA is by far the largest market for Apple products, generating about half its revenues. Analysts have estimated that Apple could sell between 2.5 million and 6 million iPads this year, which would make it by far the largest seller of ‘tablet’ computers in the world. It is estimated that about 1.25 million non-Apple tablets will be sold in 2010.



1.      What factors do you think in?uenced the demand for the iPad? How might these factors change over time?

2.      Do you think Apple was simply lucky with the iPad?

3.      What effect might the delayed launch have on sales of the iPad?

4.      The delay gave the company time to think about the international price of the product. What factors might determine how much the company could increase the price outside the USA?

5.      Pen down your views in context with the case  study.

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