Supply and Demand of Mobile Phones
Almost every individual across the globe uses mobile phones services and due to this product has many manufacturers. The primary producers are Samsung and Apple conglomerates which have dominated the contemporary market. There is, therefore, stiff competition in the mobile phone market and every firm is trying to be as creative as possible to obtain the highest proportion of the market share (Rittenberg " Tregarthen, 2012). This term paper provides an insight into the supply and demand of the cell phones in the marketplace. Additionally, it will focus on shifts in demand and supply has changed the equilibrium. Lastly, the paper will elaborate on whether there are changes forecasted within the marketplace as well as the number of a cell phone in the future.
The Factors Influencing the Demand of Mobile Phones
The cell phone market has been regarded as most turbulent market climate currently due to deviations and stiff competition. Thus, the consumer's decision process should be considered and the factors influencing the demand for mobile phones.
Advancement in technology
Introduction of new mobile phone features and technologies have significantly changed the behavior of most consumers towards the procurement of mobile phones. For example, the invention of Bluetooth technology increased the demand for mobile phones (Rittenberg " Tregarthen, 2012). Other features such as camera had the same impact. The leading companies such as Samsung and Apple are conducting market research to determine the type of technology and features consumer would prefer so that they can introduce them in their products using a high level of creativity and technology (Rittenberg " Tregarthen, 2012). Therefore, is apparent that the demand for mobile phones has risen as a result of improvement in technology.
The Preferences and Tastes of Consumers for the New Models
Young people are preferring the newly invented mobile phone brands. The modern devices which are launched in the contemporary market are smaller, more sophisticated and present more option to this generation (Rittenberg " Tregarthen, 2012). For instance, accessibility to computer interface, games as well as emails. The invention of new phone models has made most young to discard the older ones in favor of the current brands. Moreover, the new models are more flexible when sending text messages and also allow the user to speak in a low tone which maintains their privacy (Rittenberg " Tregarthen, 2012). Thus, the consumer preferences and tastes have resulted in an increase in the demand of the new brands of cell phones.
The Factors Influencing the Supply of Cell Phones
The Changes in Consumer Expectations
The substantial shifts of consumers expectations in the economy affect an enterprise decision making which in turns influences the supply of mobile phones in the market. When a new brand of mobile phone is introduced in the market – there consumers expectations are usually high and this increases the supply of the product – they perceive that the new model is better than the previous ones (Rittenberg " Tregarthen, 2012). The high demand for the brand leads to an increase in the supply. For example, the flip mobile phones were rampant in the marker between 2000 and 2009. During this period, there supply for this merchandise was very high in the market to satisfy the high demand. However, few people today are interested in flip phones and the supply has significantly reduced.
The Cost of Production
An increase in the production value of cell phones makes various corporations to incur massive loses which leads to a decrease in the supply of the product. If the number of inputs increases while holding other factors constant – the output cost rises and this causes a significant shrink in the profits (Rittenberg " Tregarthen, 2012). Thus, a cell phone company has to make a rational decision. For example, it has to determine whether shifting some of the available resources as well as an effort to other merchandises will convalesce the company's well-being.
Competition in the Market Structure
The stiff competition of the mobile phones in the market affect the supply of the commodity. The competition can be as a result of changes in technology (Rittenberg " Tregarthen, 2012). For example, changes from 3G to 4G. A company that integrates the best features and technology dominates the market which reduces the market size thus decreasing the supply. Hence, a reduction in the competition lessens the quantity of a particular commodity in the marketplace.
How Shifts in the Supply and Demand of Cell Phones Have Influenced the Equilibrium Price
The equilibrium price for the cell phones in the market can be considered as the cost at which the quantity supplied is equal to the quantity demanded. Classically, an increase in the demand for cell phones raises the equilibrium quantity as well as the equilibrium price because more customers are more than willing to purchase the merchandise (Saharan, 2012). The high number of consumers procuring the phones allows the equilibrium quantity to be attained since higher volumes are marketed. Additionally, the price increases to equilibrium due to the high demand and purchase from consumers (higher equilibrium price) (Saharan, 2012). On the centrally, a decrease in the demand for cell phones reduced the equilibrium price and equilibrium quantity. The end results are shrinking in the demand and price of the commodity.
Changes in the Demand and Supply of Cell Phones in Future
I predict remarkable changes in the demand and supply of the cell phones for the reason that there are many factors which are driving these deviations. One of the factors is market evolution. The rapid evolvement of the product has reached a point that the consumers are finding it hard to cope with the latest transformations (Varian, 2014). The current brands are drastic and diverse and therefore many conglomerates are facing difficulties in terms of adapting. For example, Samsung and Apple have transformed the market by launching brands of high quality and technologically advanced. They have therefore grabbed the largest market share in the mobile phone markets because many consumers are going for their products (Varian, 2014). There is therefore high demand and supply for this product to quench the consumer's thirst for this commodity. Therefore, the supply and demand for the cell phone will continue to elevate in the market in future.
Conclusion
In a nutshell, the mobile phone industry has emerged as one of the most critical sectors when assessing the demand and supply of commodities worldwide. The demand for cell phones is affected by factors such as technological changes. Nevertheless, the quantity of cell phones in the market is usually regulated by factors like cost of production. Finally, the prospect of demand and supply for mobile phones is that both will continue to skyrocket because the market is evolving.
References
Rittenberg, L. " Tregarthen T. (2012). Principles of Microeconomics. Flat World Knowledge
Saharan, P. (2012). Demand-Supply-Analysis (Nokia). LinkedIn Corporation. Retrieved (on November 12, 2017) from https://www.slideshare.net/hooda_27/demandsupplyanalysis-nokia
Varian, H. R. (2014). Intermediate Microeconomics: A Modern Approach: Ninth International Student Edition. WW Norton " Company.
