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Apple is known worldwide for its high sales, great innovation and long-lasting products. In September 20th 2013 when the iPhone 5c and 5s were both released, the sales expectations for both of them were high. However, the iPhone 5s seemed to have a higher demand than the 5c. Because of that, the iPhone 5c had lower total revenue compared to the 5s’s. This caused several complications for Apple Inc. who was left with an excessive amount of the 5c. They have to find ways to adjust this problem without greatly affecting their usual total revenue.
The concept of this article relates to chapter 4 because it deals with the effects that demand and supply have on a company. The 5s had a higher demand because there was a change in the consumer’s tastes. However the high demand lead to a shortage of the 5s, which would eventually make them raise the price for a period of time. On the other hand, the 5c had a low demand, which didn’t meet the usual expectations. Apple was left with surplus of the iPhone. Due to the fact that these products are both elastic Apple Inc. would have to carefully look for ways to solve this problem because the iPhones are sensitive to price change.
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