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Consumer Demand Analysis
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Consumer Demand Analysis
Introduction:
In any economy, gross output is the measure of the total production of new goods and services in a given period of time. In this assignment, total economic output of iPhone 6 plus will be studied. The iPhone 6 plus is a smartphone designed by the famous brand "Apple". Apple is an American multinational company whose headquarter is located in California. iPhone 6 plus was released on September 2014. It received a positive review initially, but it got affected by economic fluctuations. Recession and inflation became the main reason for iPhone 6 plus negative response ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a461lrgclr","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}The Economic Impact of Apple\\uc0\\u8217{}s iPhone 6,\\uc0\\u8221{} n.d.)}","plainCitation":"(“The Economic Impact of Apple’s iPhone 6,” n.d.)"},"citationItems":[{"id":1254,"uris":["http://zotero.org/users/local/ccgWoSRn/items/VNZ22PGE"],"uri":["http://zotero.org/users/local/ccgWoSRn/items/VNZ22PGE"],"itemData":{"id":1254,"type":"webpage","title":"The Economic Impact of Apple's iPhone 6","URL":"https://insights.dice.com/2014/10/29/economic-impact-apple-iphone-6/","accessed":{"date-parts":[["2019",1,31]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“The Economic Impact of Apple’s iPhone 6,” n.d.). The economic fluctuations lead to the unemployment that also results in fall of iPhone 6 plus sales.
Economic Fluctuation and iPhone 6 plus:
Economic fluctuations are the variations in the level of national income that represent the growth or contraction of the country. The market of every nation is dynamic rather than static. Increase in national income leads to the growth of the economy, while fall in national income means there will be a decrease in the growth level. The economic fluctuation was one of the crucial factors that affect the iPhone 6 plus market. Exchange rate, recession, and inflation. During the recession, the economy of America falls which took a while to recover. This time gap in declining and recovery had a negative impact on iPhone 6 plus. The recession leads to an increase in interest rate while results in low currency value. The sales-output decline due to the currency issue. During the inflation period, prices of the goods increased which results in the decrease in purchasing power of iPhone 6 plus ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a1d9r6v84fn","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}Section 4,\\uc0\\u8221{} n.d.)}","plainCitation":"(“Section 4,” n.d.)"},"citationItems":[{"id":1248,"uris":["http://zotero.org/users/local/ccgWoSRn/items/QM8TZJWE"],"uri":["http://zotero.org/users/local/ccgWoSRn/items/QM8TZJWE"],"itemData":{"id":1248,"type":"post-weblog","title":"Section 4: Types of Unemployment and the Definition and Significance of Full Employment | Inflate Your Mind","URL":"https://inflateyourmind.com/macroeconomics/unit-4/section-4-types-of-unemployment-and-the-definition-and-significance-of-full-employment/","shortTitle":"Section 4","language":"en-US"}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Section 4,” n.d.).
Unemployment and US-China relation:
Apple is an American company, but a large amount of its products are manufacturing in China. This is because labour in China is much cheaper and efficient than the labour in America. If the economy of both the country start contracting that is happening due to the trade war between the two nations, then cyclical unemployment will increase for the Apple Company. As the trade between two company will decrease, it will decline the production and supply of iPhone 6 plus ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"ac8g1vg3ut","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}Hearing on U.S.\\uc0\\u8211{}China Economic Challenges,\\uc0\\u8221{} n.d.)}","plainCitation":"(“Hearing on U.S.–China Economic Challenges,” n.d.)"},"citationItems":[{"id":1251,"uris":["http://zotero.org/users/local/ccgWoSRn/items/AUZ8ZII7"],"uri":["http://zotero.org/users/local/ccgWoSRn/items/AUZ8ZII7"],"itemData":{"id":1251,"type":"post-weblog","title":"Hearing on U.S.–China Economic Challenges: The impact of U.S.–China trade","container-title":"Economic Policy Institute","abstract":"Does U.S.-China trade have an impact on U.S. jobs, wages and benefits?","URL":"https://www.epi.org/publication/hearing-us-china-economic-challenges-trade/","shortTitle":"Hearing on U.S.–China Economic Challenges","language":"en-US"}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Hearing on U.S.–China Economic Challenges,” n.d.). Due to the decrease in the production of iPhone 6 plus, employees of the company will start losing their jobs, and cyclical unemployment will increase.
Causes of Unemployment:
The four main causes of unemployment are low consumer demand, inflation, interest rate, and recession. The fall in iPhone sales can cause cyclical unemployment, and cyclical unemployment is affected by these four factors. During recession government increase interest rate to control the national debt which can cause inflation in the economy thus unemployment increases. In the case of iPhone 6 plus these factors become the reason of decline in the total outcome of the product. Sales of iPhone decreased with the increase in inflation and a decrease in productivity ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a2aimemf7ip","properties":{"formattedCitation":"(Reddy, 2016)","plainCitation":"(Reddy, 2016)"},"citationItems":[{"id":1250,"uris":["http://zotero.org/users/local/ccgWoSRn/items/93CVESP4"],"uri":["http://zotero.org/users/local/ccgWoSRn/items/93CVESP4"],"itemData":{"id":1250,"type":"post-weblog","title":"What is Unemployment? Its Main Causes, Effects and Solutions","container-title":"WiseStep","abstract":"The issue of unemployment is a very serious one indeed, which cannot be tackled easily. For your help mentioned here are few unemployment causes and effects","URL":"https://content.wisestep.com/unemployment-causes-effects-solutions/","shortTitle":"What is Unemployment?","language":"en-US","author":[{"family":"Reddy","given":"Chitra"}],"issued":{"date-parts":[["2016",9,21]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Reddy, 2016).
US Inflation and iPhone 6 plus:
The increase in consumer spending is great for iPhone 6 plus. This means that consumers have more money to spend on their favourite products. Inflation and consumer spending has positive relation. With the increase in inflation, people get more money to spend therefore demand iPhone 6 plus can be increased. To control the inflation rate government increase interest rate which leads to an increase in the price of goods and services. In the case of iPhone 6 plus, the company works in the monopolistic competitive market which means they cannot increase the price that results in low revenue.
Conclusion:
iPhone 6 plus is the smartphone product of Apple Company. Apple is an American multinational company. iPhone 6 plus was ranked one of the bestselling product in 2016. The product affected by the economic condition of the country. The main factors that affected the product include recession, currency, inflation, and unemployment in America.
References
ADDIN ZOTERO_BIBL {"custom":[]} CSL_BIBLIOGRAPHY Hearing on U.S.–China Economic Challenges: The impact of U.S.–China trade. (n.d.). Retrieved from https://www.epi.org/publication/hearing-us-china-economic-challenges-trade/
Reddy, C. (2016, September 21). What is Unemployment? Its Main Causes, Effects and Solutions. Retrieved from https://content.wisestep.com/unemployment-causes-effects-solutions/
Section 4: Types of Unemployment and the Definition and Significance of Full Employment | Inflate Your Mind. (n.d.). Retrieved from https://inflateyourmind.com/macroeconomics/unit-4/section-4-types-of-unemployment-and-the-definition-and-significance-of-full-employment/
The Economic Impact of Apple’s iPhone 6. (n.d.). Retrieved January 31, 2019, from https://insights.dice.com/2014/10/29/economic-impact-apple-iphone-6/
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