The information below represents the market demand and supply schedules for Apple iPads - Leaving Cert Economics - Question 2 - 2013

The market supply curve can be plotted using the supply data. This curve typically slopes upward from left to right, reflecting the direct relationship between price and quantity supplied. The quantities supplied at different prices are:

• At €300, 200 units
• At €400, 400 units
• At €500, 600 units
• At €600, 800 units
• At €700, 1,000 units.

The market equilibrium price occurs where the quantity demanded equals the quantity supplied. From the data, at a price of €500, both the quantity demanded and supplied equal 600 units. Hence, the equilibrium price is €500.

The market equilibrium quantity is the quantity that corresponds to the equilibrium price. In this case, the market equilibrium quantity is 600 units, which can be indicated on the graph where the demand and supply curves intersect.

A normal good is defined as a product for which demand increases as consumer incomes rise. This occurs because consumers tend to purchase more of such goods as they have more disposable income, maintaining a positive relationship with income levels.

Substitute goods are products that can replace each other in consumption. An increase in the price of one substitute leads to an increased demand for its alternative. For example, if the price of iPads rises, consumers may choose to buy another tablet instead.

The introduction of the Samsung Galaxy Tab 10 can lead to a decrease in demand for iPads. This is because consumers may shift towards the Galaxy Tab if they perceive it to be a better value option. Consequently, the demand curve for iPads would shift to the left, indicating reduced demand at every price point.

1. Reduce iPad price: Lowering the price of the iPad could attract more consumers who may be considering the Samsung Galaxy. This strategy aims to enhance its competitive position in the market.

2. Innovate and enhance product features: Apple could improve the iPad's design, specifications, or advertising strategies to differentiate it from the Galaxy Tab, making it a more appealing option. Enhancing features would potentially reinstate consumer interest.

The financial cost refers to the direct monetary expenditure incurred when purchasing an iPad. This includes the price of the product itself, as well as any additional costs like taxes or accessories. It represents a real financial sacrifice made by the consumer.

Opportunity cost is the value of the next best alternative foregone when making a purchase decision. In the context of buying an iPad, it involves considering what other purchases or investments the consumer could make with the money spent on the iPad. This cost helps consumers evaluate personal finances and prioritize needs.

1. Can the consumer afford the iPad?: Understanding the financial cost helps assess if the purchase is feasible without straining financial resources.

2. Does the product represent good value?: By evaluating opportunity cost, consumers can determine if spending money on the iPad is better than investing it in alternatives, allowing for more informed purchasing decisions.