Scenario 2 (length: as needed) Apple (relatively) recently introduced different

Question

Scenario 2 (length: as needed) Apple (relatively) recently introduced different "versions" of the iPhone and iPad-in particular, currently Apple sells four versions of the iPad (iPad Air, iPad with Retina display, iPad mini with Retina display, and the iPad mini-http://www.apple.com/ipad/compare/). Not available with hard drives that range from 16GB to 128GB, and with the A7 chip. The other versions of the iPad and iPad mini are only available with a 16GB hard drive and feature slower chips (A6X and A5), but at a lower price than the top of the line models. e that the "top of the line" iPad and iPad mini are 1. Briefly explain why continuing to sell the older models when the newer generation's models are 2. Why are the lower tier models are currently only available with the 16GB hard drive, when previously 3. When the iPad mini was first introduced, industry experts estimated that for every 4 million iPad minis introduced is an example of price discrimination. How does this help Apple reach a larger market? (when they were the top of the line models) they were available with larger hard drives? that were sold, sales of the full-sized iPad would decrease by 1 million units. Assuming that is the case, explain why introducing the iPad mini was a good idea, even with some level of cannibalization.

Explanation / Answer

Answer:-

Price discrimination:

we know that price discrimination means a pricing strategy that charges customers diffrent prices for the same product or service.price discrimination is the feature of monopolistic competition. in the monopolistic competition there are large number of buyers and sellers are available in the market. They sell diffrentiated product. the price discrimination is the best feature of monopolistic competion.

here we discussed about the Perfect price discrimination. under perfect price discrimination the monopolist know the exactly the willingness to pay of each customer and can charge each consumer a diffrent price. so the monopolist to know the exact amount the consumer will pay their product so they can get the maximum amount of surplus.

Without perfect price discrimination consumer do not walk to the stores with signs displaying their willingness to pay.So this is the case of Apple model. The model developers to know how much the consumer will pay their product. In the old model they can get the maximum benefit or profit for their product. So they can sell more of that model at lower prices. But in the new models are very expensive and people cannot buy much of their produce so their profit will be decreased.

Cannibalization:

We know that cannibalization means that this is a legalized gambling.under cannibalization when one producer offers a product or service that consumer prefer to those previously available. So cannibalization is the result of competion. It is the normal and healthy part of the market process that ensure help the consumers to get the product they mostly desired. Under cannibalization the seller cannot directly discriminate the consumers.they can structured product available and discriminate indirectly.

The same case under the Ipad second case. the producer degraded low priced items and upgraded high priced item.this is most attractive in the case of Ipads. so the producers can get maximum benefit .

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