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Elasticity of Demand on Apple’s App Store
26th January 2012
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.