Sunday, July 28, 2019

Economics for Business 3 Essay Example | Topics and Well Written Essays - 750 words - 1

Economics for Business 3 - Essay Example Various macroeconomic variables were affecting the demand and supply of the products produced by Apple exist. Additionally, these variables are essential in ensuring that Apple poses a cutting edge in the market today. These variables include interest rates, GDP, GDP plays a key role in influencing the demand supply of the Apple Inc. in 2013, for instance, the global forecast for GDP was at 3.3% according to the Global Macroeconomic Outlook. This was a relatively slow growth, having in mind that the growth of the GDP in the last decade hit a 3.8% gain. Usually, slow growth in GDP is followed by a fall in demand for goods and services. Apple being a producer of cyclical products, led to a fall in demand of their products. Additionally, slow growth rate may end up leading to the company lowering its prices hence leading to a reduction in profit margin (Tynjà ¤là ¤ &Eloranta, n.d). In 2010, growth rate in the economy was registered and hence Apple’s profit margin rose from 21.5% in 2010 to 23.8% in 2011. A rose in profit margin also came from the fact that there was the demand for Apple’s product. Interest rates affect the demand and supply of products of a given organization to a large extent. An increase in interest rates by banks leads to decrease in demand for products. When interest rates increase, people tend to avoid dealing with the increased interest rates and wait till when the rates reduce. Apple Inc. Being an organization that deals with product sales is also affected by interest rates. In Japan, one of the major consumers of Apple’s products experienced increased interest rates in 2012. On a large extent, it led to the reduction in supply of the Smartphones in Japan. Inflation refers to the long-term rise in price of goods and services due to the devaluation of a currency. Apple targets several consumers in various

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