On the article it says " Lenovo PC ousts Hewlett-Packard (HP) as the worlds most top PC makers",i will be discussing on three economics concepts Quantity demanded, quantity supplied and effects of substitution products.Quantity demanded of a good or services is the amount that consumers plan to buy during a given time period at a particular price while quantity supplied of a good or service is the amount that producers plan to sell during a given time period at a particular price where by Substitution effect is when the price of a good rises other things remaining the same , its relative price and its opportunity cost rises. As it rises the incentive to economize on its use and switch to a substitute becomes stronger.
This article talks about how Lenovo PC’s have sold more than Hewlett-Packard the research firms Gartner and IDC are discussing on the reasons for their market shares to being high and also why lenovo a chinese PC maker is now the worlds most top PC maker.
Firstly,on the article Gartner said “Lenovo shipped 13.8 million units in the third quarter compared to HP’s 13.55 million units” whereby through shipping a large million unit than hewlett packard (HP) , Lenova were able to get a larger market share and also its because they also cut their price aggressively hence due to having a low price the demand of lenovo PC increased hence the quantity demanded for lenovo will increase while the demand for Hewlett packard PC decreased since many buyers demanded the one with a low price and as Andrew Milroy of Frost & Sullivan told BBC due to the momentum that Lenovo has had then it makes it inevitable for it to be the number one PC maker across all charts so due to that even if hewlett packard had shipped more units the market share would not have been as large as Lenovo’s since buyers will buy if the product is of low price and also of good quality and that is what lenovo had that is why it had the bigger market share after shipping a 0.3 million units more than HP.On the change in the quantity demand curve , since the quantity demanded for lenovo has increased due to decrease in price then the demand curve shifts rightward and for HP since the demand of the PC has decreased then the demand curve will shift leftward.
Another Economic concept from this article is quantity supplied ,BBC news article states that IDC another research firm has kept Hewlett-Packard at the top, though the difference is not as big as the first shipment was made, in this analysis we see that Hewlett-Packard is leading with a shipment of 13.9 million units and Lenovo has 13.8million units shipped where by here the difference in unit is 0.1 million units , however though the shipping of Hewlett-Packard was big the market share was 15.9% and Lenovo’s market share being 15.7% which the difference is 0.2% .The supply of Hewlett-Packard was large but the market share was not that large compared to the market share that lenovo pc had since the prices on Hewlett-packard was not cut as the first third quarter lenovo had shipped , if the quantity supplied is high the sellers benefit from it but also if there is another related good which in this case it is Lenovo , buyers will tend to be with the low price hence the demand of Hewlett-Packard will decrease and also there will be a surplus of goods,since the price of lenovo has fallen then the quantity supplied decrease while of HP will increase since the price of the PCs are high.
Lastly effects of substitute goods , on this article it is seen how the global PC shipment has fallen down for 8% during the quarter at the same period, the article says due to having tablet PCs like ipad or samsung galaxy the personal computers have been hurt since it has slowed the global economy of personal computers, when a better substitute is brought like this since it is much cheaper than the PCs, it is also much smaller and very portable to carry anywhere and it has everything that a normal PC has hence people tend to buy the tablets since it is much convenient and preferable,the demand of PCs will decrease since the price of the tablet is low but if the price of the tablet was high than the personal computers then the demand of PCs will increase and the demand of the tablets will fall.The article also state that they are struggling to find a product that may help turn around its fortune so as people will keep on buying PCs instead of tablets that is currently causing severe slump to the PC market.
Conclusively,From this article it has been seen how the quantity demand of a certain good or service can bring an effect to another relative good mostly because of the price fall and also how if the supply of a product is high then the market share is high when other factors remain constant, in this article the personal computers are facing a hard time due to coming of tablets which has more advantages compared to personal computers and also due to technology and globalization people tend to buy the latest products and try them out and do not like sticking with old technology.
By Jacqueline Terry
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