MANAGERIAL ECONOMICS

EMBA-508, SECTION-A
Case Study

PC Prices: How low can they go?

Applicable concepts: Non-price determinants of demand and supply”

SUBMITTED TO,    
   
MD YOUSUF HARUN   SUBMITTED BY,
ASSISTANT PROFESSOR    
DEPARTMENT OF FINANCE & BANKING   MD RAKIBUL ISLAM
JAHANGIRNAGAR UNIVERSITY   ID-20202086
    DEPARTMENT-MARKETING
BATCH-27

th
Date of Submission: 28 March 2021

PC Prices: How low can they go?

ID-20202086
 Applicable Concepts: Non-price determinants of demand and supply”

This article mainly focused on how Personal Computer took place on market and how people are
become habituated on this advanced technology to reduce others machine consumption like
radio, Television. In this modern era, we are living on technology and our daily life becomes
more impacted on these type of technologies products and PC is one of them which become our
necessity product.

 Change in Quantity Demand-When 1st time PC was invented it was a luxury

product on economy language. Beginning of that invention, PC was only use for
invention or scientific use for big companies on abroad, as well as the price was so
much higher. That time PC price was determined by companies with using different
factors like the price was higher because of Luxury product, the demand was not so
much higher compare to present, the supplier was less as in market was new. Luxury
products used only by few customers. All that impact on price finalizing for PC. As
we know that, when demand is low, price become higher as well as supplier are few
in market because of luxurious products and consumers was less in market.
 Price system -one of the major concerns of any economist. A price system is a
method for getting sorted out of the financial movement. It does this essentially by
planning the choices of customers, makers, and proprietors of gainful assets. Many
financial specialists who have no immediate correspondence with one another are
driven by the value framework to supply each other's needs. In an advanced economy,
the price system framework empowers a shopper to purchase an item he has never
recently bought, created by a firm of whose presence he is ignorant, which is working
with reserves halfway acquired from his own investment funds. In this Article, topic
was covered how price system is become the determinates and how it impacts on
others factors as well in economy.
 Quantity of supply and others parts availability-In this article, also mentioned that,
how time have passed, and computer pricing is decreasing to find out more customers
availability. Average income family from US also can bought the PC when the price
was decreased and as well as other parts of parts like microprocessor, chips wholesale

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 price fallen which impact on PC price, and it becomes lower than beginning invention
on PC.
 Adaption of new Marketing strategies-Day by day, when people are getting more
advanced knowledge of technology, pc markets shift to others advanced technology
parts business as well to grab the consumer attention. PC maker and their industry
bypassing their industry and promote their products on website and Dell come out the
different strategies to sell their huge amount products by reducing the middleman
retailer point. Dell directly sells their product to customers and it minimizes their
cost, that’s why consumer able to purchase Dell PC lower than other competitors in
the PC market. In this article, mentioned the price war of 2000 in PC manufacturing
market. Manufacturers came out different strategies and they cut their profit margin,
but when demand uplift manufacturer again increase the price and try to satisfy their
business which was lost margin. Manufacturer use different strategies by cutting off
the price of Computer chips, processor on price war so they can sustain to the market
and when situation become uphold, they also come out new invention with higher
price to incur their loss.
 Diversity of Products extension-As well as producer of PC come out new products
to sustain the market and using diversification of products to uphold their market
share. A large portion of PC makers has extended to create other electronic items like
clothes washers, Refrigerators, Driers and so on to appreciate the economies of scale.
This has led to a fall in PC costs as makers target expanding deals by diminishing
costs. However long turnover stays high, they appreciate the economies of scale.
Genuine instances of PC makers who have expanded are Samsung, Sony and so forth,
which have assisted with diminishing expense of creation per unit. This is done
through developing new items yet selling in a similar existing business market.
 Price war-In this recent year 2009, Dell and Asus can come out their products and
sell only their PC comparatively lower price at $300. This is possible only because of
their different strategies and as well as how they can adapt the economic situation and
able to coup with that price war. At the beginning of PC invention time, it was
expensive products which compare to luxury products and supply was also low that’s
why the price was higher. But now on this modern era, all offices, Institutions, others

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 work activities we all are using PC for our work and time consuming. Time passed
since the cost change – for instance since the PC costs fell the amount requested
toward the starting changed just marginally, yet later the amount requested expanded
as individuals got mindful of the upsides of PCs and how they can improve on a great
deal of work, consequently prompting the demand for PCs to be elastic.
 Ability of spending-The amount of pay spent on PCs – this shows that the more
income that individuals have for spending then the more elastic is the interest for the
item. As individuals have more pay than PCs turns into a need consequently demand
of PCs will raise. Day by day Demand is increasing of PC and supply becomes high
of products demand. That’s why to sustain in this market manufacturers decrease the
price and it becomes the necessity products now.
 Substitute Products availability-Substitute’s products also have an important impact
to fall the PC price. Notebook, Mobile phone with different application now become
the substitute of PC. From economical perspective, we know that when substitute
products are available in market and price is lower than real products the demands of
genuine products become lower. That’s also an important reason why PC price are
fallen. The closeness of substitute – assuming substitutability of items is that nearby,
the Elasticity of demand will be Elastic. PC industry is working in a nearby
substitutability condition, implying that customers have numerous alternatives of
subbing from more choices, for example, web perusing should now be possible from
cell phones, iPhones, work areas have been supplanted by laptops, whereby now
individuals (particularly the youthful ages) are in any event, going for Notebook as its
more convenient than the typical PCs. With PCs close substitute will likewise be
between a Dell PC, Apple, Hewlett Packard or a Toshiba.
 Components parts of PC-Falling the components cost also help manufacturers to
reduce the PC cost. Organizations, for example, Apple produce their own segments
which lead to more economies of scale. Falling costs of an item may not exclusively
be because of economies of scale, may likewise be a consequence of different factors
like financial variables (which incorporates changing trade rates, changes in the
monetary pattern of the country), Political elements may likewise impact falling costs
like changing government strategies. Social perspective can likewise impact the costs

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 as what is the market pattern at a given time; individuals will in general favor
Notebook to typical laptops or utilization of cell phones than PCs. The falling
expense is gotten from the idea where makers ensure that consistently they produce
until MR=MC and they don't go past that as it will be unbeneficial to the firm.
 Use of modern size and design-New advancement was not restricted only the
production of PCs yet additionally PC accessories, size and plan of PCs and bundling
materials which affect last cost of PCs. PC size and configuration influence
transportation costs, the greater the size the more expense in transportation. Current
PC are smooth, level screen and little thus simple to pack and conveyance with less
costs which in the long run become modest to purchase.
 Decentralization of assembling-By using this modern advancement and
technologies, parts of computers are not produced in only one location. PC
motherboard can be created in the USA while a mouse can be created in Taiwan and
console in Germany and amassing done in China. By this decentralization of
assembling, it has been feasible to deliver PC at the lowest cost conceivable. Large
scale manufacturing in Asian nations like India, China and Taiwan while in these the
labor force is cheaper than western nations which help to decrease the production cost
as well as which eventually drop selling cost.

In conclusion, we can say that different factors are significantly impact on price of PC. This
article shows how price of pc have been changing in this modern age. PC manufacturers come
out with different strategies to be sustain their name on this technology advanced market. Any
type of business only become successful when you will adapt the situation and able to change
your strategies on market demand and supply.

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