• Home
  • Subjects
  • Business
  • The number of owners of mobile phones has grown rapidly and hence the demand for mobile phones has also grown rapidly. Yet the prices of mobile phones have fallen. Why? Explain using relevant diagrams.

The number of owners of mobile phones has grown rapidly and hence the demand for mobile phones has also grown rapidly. Yet the prices of mobile phones have fallen. Why? Explain using relevant diagrams. - Essay Example

Only on StudentShare

Extract of sample
The number of owners of mobile phones has grown rapidly and hence the demand for mobile phones has also grown rapidly. Yet the prices of mobile phones have fallen. Why? Explain using relevant diagrams.

However, in the mobile phone market, the demand for mobile phones increases as the price of the mobile phones decreases. This can be attributed to various reasons.
Begg et al. (2011) notes that, for there to be an increase in demand, there have to be a change in one or more of the demand determinants. An increase in demand will in turn cause a shift to the right of the demand curve. When there is a shift to the right of the demand curve, the markets equilibrium will be disrupted thus causing a temporary shortage of the product being demanded. The temporary shortage created is eliminated with an increase in price of the product. However, in the mobile phone industry, there has been an increase in demand and a decrease in their prices. This can be attributed to various factors (Research and Markets 2011).
Sloman & Garratt (2010) posits that an increase in demand of mobile phones can be caused by an increase in buyers’ income. When the level of income of the buyer increase, the buyer gets more money to spend on a certain commodity, which they are interested in. this happens when there is an increase in the income for a normal good. Moreover, an increase in demand for mobile phones can be attributed to a decrease in income of the buyer for an inferior good.
Moreover, an increase buyer’s preference on mobile phones against other communication gadgets has caused a shift in the demand curve for mobile phones. Mobile phones are preferred since they are easier to use and results to instant feedback as compared to earlier means of communication such as letters. Moreover, mobile phones are preferred since they are cheap to afford as well as offers flexible means of communication (Mobile Promotions Market 2012). Mobile phones have gained consumer confidence in that the advanced systems allow the user to make audio-visual calls.
Furthermore, mobile phone industry has experienced a boom in sales due to inflexibility of its competitors. For ...
Download paper


An increase in demand for a product results when buyers have the will and the ability to purchase a good or a service at the stated price. This…
Author : qbins

Related Essays

Mobile Phones Marketing
As wireless technologies evolve the coming mobile revolution will bring dramatic and fundamental changes to the world. This revolution has already begun and is gaining momentum. The revolution will impact numerous facets of our daily lives and the way business is conducted and will provide important data in real time to assist decision makers exert great influence on communications between businesses and their customers and transform the way we live our lives. The challenges facing mobile services, such as changes in business strategies, investment risk, limitations in mobile devices,...
16 pages (4016 words) Case Study
Mobile Phones Marketing Coursework
Such a communication now forms a crucial part of managerial activities. This study is an effort towards analysing the mobile phone market in general and to what extent advertising or marketing communication activities help in building brands, creating brand loyalties, increase in sales, cutting costs etc. How customer perceptions have changed over the years towards going for a product which is seen all over the media space, fliers, signboards etc. will form the cornerstone of preparing marketing strategies for any company. Mobile phone market comprises of a range of brands offering a variety...
24 pages (6024 words) Coursework
For example, as material resources such as buildings, equipment or machinery deteriorate or lose efficiency; or as human resources get older, or as skills and abilities become outdated. Some of this change can be managed through careful planning; for example, regular repairs and maintenance; choice of introducing new technology or methods of work; effective manpower planning to prevent a large number of staff retiring at the same time; management succession planning; training and staff development (Handy, 1993).
9 pages (2259 words) Essay
Mobile Commerce
Mobile commerce or m-commerce is considered as the next logical step or advancement of business systems after electronic commerce or e-commerce and refers to transactions with the use of a wireless device and data connection that can result in payments for information, services and goods. Mobile commerce is facilitated by mobile phones rather than the internet and includes services of online buying and selling as well as banking, payments and ticketing.
22 pages (5522 words) Assignment
are mobile phones fashionable?
A strategic plan entails all aspects of the business. Of paramount importance to any business is the market. This comes before the actual business is initiated. The plan will illustrate the kind of market to venture in. In the case of Nokia Telecommunication Company, the details of the market of target could include: office managers, the business world, students who really on research and could benefit from the internet. Nokia could also target the general public who needs very cheap and affordable phones due to their low economic status.
16 pages (4016 words) Case Study
Palmtop Mobile Phones
It is the world most globalizes country whose capital is London which is the third major financial center of the world. The most recent official figures shows that the GDP growth rate of United Kingdom is 3.1% where as GDP grew in 2006 was 23/4% and more than 3% in 2007. According to 2006 rating, the GDP is $ 2.1 trillion where as commercial service imports increases to $ 600 billion. The population of UK according to 2006 was 60,587,000 and out of this 50,763,000 is living in England.
16 pages (4016 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!