Apple overcome consumers’ Diminishing Marginal Utility for Ipads?
How did Apple manage to overcome the decreasing marginal utility that consumers had for iPads?
Apple has introduced new features in order to entice previous purchasers to upgrade to newer versions.
Apple overcome consumers’ Marginal Utility
When attempting to explain the concept of marginal usefulness, we could use the examples of iPhones and water. Because iPhones are a luxury item that bring their owners a higher level of satisfaction, their price is significantly higher than that of water. Even though water has a higher overall utility because it is required for life, the iPhone has a higher marginal utility. This is because the iPhone is more convenient.
Diminishing marginal utility
This helps to explain why one additional unit of water is rarely as valuable as one additional iPhone; although water is necessary for day-to-day life, iPhones are luxury consumer goods that are not required. Therefore, whenever a person or business proprietor makes a decision that has an economic impact, they do so in a manner that is somewhat nuanced, depending on how valuable an additional unit of the product is to them at a given point in time.
Marginal Utility and Marginal Value: An Overview
One of the reasons for the government to intervene and regulate the demand curve to make it slope downward. That the greater quantity of a particular product a customer possesses, the less valuable each additional unit is. To put it another way, the lower the availability of a particular solution, the less valuable it is on the market. One good example is the fact that once the iPhone was released, it became extremely uncommon (in large demand but limited distribution ). As a direct consequence of this, Apple set extremely high prices for its first generation of iPhones. However, despite the fact that the products are becoming more readily available, marketing them is becoming progressively more challenging with each new iPhone that Apple introduces. Because of this, it is required to release new versions of this iPhone on an annual basis, each of which is distinct from the versions that came before it.
The Relationship Between Marginal Utility and Marginal Value: An Explanation
In some contexts, the concepts of marginal utility and marginal value can be utilized interchangeably to refer to the same thing. The word “marginal,” which refers to the slight change that occurs as a result of an increase or decrease in the price of a service or good per unit, is the one that best describes each of these aspects. It’s possible that this will appear complicated, but in reality, it’s not. After you have gained an understanding of the significance of the associated financial theories, it will be simple for you to recognize the differences between the two terms.
In the 1870s, economists first began to imply that human beings make decisions “about the margin,” which is when the concept of marginalism began to take shape as a formalized theory. By analyzing the marginal utility of goods and services, marginalism, for instance, sheds light on the differences in value that exist between various products and services.
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KEY TAKEAWAYS
- By analyzing the usefulness of products and services to a marginal degree, marginalism elucidates the differences in value that exist between them.
- In some scenarios, the concepts of marginal utility and marginal value can be used interchangeably to refer to the same thing.
- The value of an additional unit of a product is referred to as its marginal value.
- When something becomes more useful, people are more eager to invest a great deal of significance in it.
- The concept of marginal utility is highly subjective, as what is useful for one person might not be exactly the same as what is useful for another.
Iphones Marginal Utility
When attempting to explain the concept of marginal usefulness, we could use the examples of iPhones and water. Because iPhones are a luxury item that bring their owners a higher level of satisfaction, their price is significantly higher than that of water. Even though water has a higher overall utility because it is required for life, the iPhone has a higher marginal utility. This is because the iPhone is more convenient.
This helps to explain why one additional unit of water is rarely as valuable as one additional iPhone; although water is necessary for day-to-day life, iPhones are luxury consumer goods that are not required. Therefore, whenever a person or business proprietor makes a decision that has an economic impact, they do so in a manner that is somewhat nuanced, depending on how valuable an additional unit of the product is to them at a given point in time.
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