Hi need urgent help on this, thanks. In 1976, Steven Jobs, then 20 years old dro

Question

Hi need urgent help on this, thanks.

In 1976, Steven Jobs, then 20 years old dropped out of college and, with a friend, developed a prototype desktop computer. With financing from an independent investor, the Apple Computer Company was bom, which revolutionized the computer industry. Sales of Apple Computer jumped from $3 million in 1977 to over $1.9 billion in 1986, with profits of over $150 million. By 1984, more than 75 companies had jumped into the market. However, by 1986, many of early entrants had left the market. PC soon became practically a commodity in 1985, Jobs was outsted after a nasty power struggle with John Scully, Apple president at the time. After unsuccessfully trying a comeback with his NeXT computer in 1986, the 43-year-old jobs was called back to lead Apple in 1997, after it had suffered years of losses and several CEO chnages. Jobs revived Apple by simplifying its confusing product line to a few models and by introducing a series of highly successful new products such as iPad, which basically recreated a new born PC market. Apparently, Apple's main competitor come from Samsung rather than other players. Other companies from China are competing from different perspectives in the industry, but they are not market leader, in terms of market share or first in product innovation. Recent Apple's product performance have drawn some thoughts on Apple's product after Steve Jobs. Question: a. Describe demand and supply in the PC market under different situation described above. (You may apply the knowledge in managerial economics when answer the question) b. What are the objective of the firm, such as Apple, as compared to other competitors

Explanation / Answer

1.
The market of computers took different shape and behavior. It started with the revolution brought in by the Apple with huge market power (a monopoly like situation), later on entry by 75 new firms to make it perfect competition like market and then became a monopolistic competition. For example, the models of Apple became very popular and demand was more that the supply. The company was making positive economic profit. After seeing this, a huge number of firms entered the market. It brought down the purchasing power of sellers and supply became higher than the demand. The firms incurred losses and went out of the market. They probably could not recover their average variable cost. It caused Apple to incur losses and the founder leader came back to lead the company. The company came with the selected models and iconic products such as iPad. It became a monopolistic market and company started earning profits once again as each product was special in its own in terms of quality and features. Here, demand and supply were balanced as different models for different classes were created.

2.
The objective of the company Apple is to:
A.   Deliver the products with best quality that serves huge value to the customers.
B.   Create selected models and each model is different, so that consumers can build clear choices.
C.   Focus upon the innovation and create a non-rivalled new market such as market for iPad.
D.   Bring ethical conduct across the value chain.

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