Elasticity of Demand on Apple’s App Store

As an Apple aficionado, I regularly visit the macrumors.com site to keep up to date with the latest news about my favourite computer company, so it was interesting to see this article today looking at the effect on revenue for app producers who put their apps ‘on sale’

As this graphic suggests, there is a significant increase in sales for a firm that reduces the price of an app- thus suggesting that their revenue may well increase due to this, indicating that mobile phone apps have an elastic price elasticity of demand. Of course, this depends on the prices firms are charging for their apps and the drop in price that was needed to cause these big increases in price. There’s certainly potential for an interesting class discussion here.

To read the whole story click here.

Unit 1 Micro: Revision Presentation on Elasticity of Demand [16 May 2012]
Unit 1 Micro: Price Elasticity of Demand [13 May 2012]
Unit 1 Micro: Price Volatility in Markets [12 May 2012]
Unit 1 Micro: True and False Revision Questions on Elasticity [10 May 2012]
“One Direction” and Elasticity [26 Apr 2012]
Unit 1 Micro: Revision on Elasticity of Demand (for Rice) [3 Apr 2012]
Unit 1 Micro: University fees and elasticity of demand [24 Oct 2011]
Fuel for Thought [5 Oct 2011]
Putting the “discrimination” into price discrimination! [26 Sep 2011]
Unit 1 Micro: The Price of Football [2 Aug 2011]
Economics of Government Subsidies - Teacher Presentation [19 Nov 2009]
Price discrimination for Big Macs [15 Jun 2008]

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