Seeking a balance

Demand for Apple’s iPod will be huge again this holiday season, no question. The only issue is supply – and how much revenue Apple will forgo because of shortages that look unavoidable.

Circuit City Stores says it expects shortages, and two smaller retailers say they’re getting less than half of what they order each week. With demand expected to surge – analysts figure Apple could sell upwards of 10 million iPods in the final quarter – last-minute shoppers can be left with empty stockings.

Of most concern is iPod Nano. Chief Operating Officer Tim Cook told analysts: ‘The demand for this product is staggering. At this point I can’t project when suppy will meet demand’.

Match the questions with the answers:

Questions	Answers
1. What will be huge this season? 2. What is the only issue to consider? 3. What will Apple forgo because of shortages? 4. What expects shortages? 5. How much are two smaller retailers getting? 6. What can last-minute shoppers be left with? 7. What is of most concern? 8. How great is the demand for this product? 9. When will suppy meet demand?	Circuit City Stores. Supply. Demand for Apple’s iPod. Less than half of what they order. iPod Nano. Staggering. Revenue. Tim Cook can’t project. Empty stockings.

Exercise 51 Now read the following text about the revolutionary-new Apple’s product. Have you heard of it? What do you think of it? Forcast its future (from the point of view of demand and supply).

Apple iPad’s - Impressive Device

January 27th, 2010 Apple iPad is official! Apple iPad’s full details have been released. Steve Jobs, CEO (Chief Executive Officer) of Apple, has just unveiled its latest product, called the iPad. Jobs said that ‘iPad is our most advanced technology in a magical and revolutionary device at an unbelievable price.’

Apple iPad’s portable tablet-like device is a revolutionary device for browsing the web, reading and sending email, enjoying photos, watching videos, listening to music, playing games, reading e-books and much more. iPad’s responsive high-resolution Multi-Touch™ display lets users physically interact with applications and content.

Once Apple iPads become available, you can predict that stores will be emptied of it within days, as happened with the 3G iPhone.

Using the Internet find out more information about Apple’s iPad. Present your reports to your group-mates.

Exercise 52 Read and translate the following text. Give your own examples of goods in joint demand or supply.

Supplementary text A

Joint Demand and Joint Supply

Goods are said to be in joint demand¹ when the use of one good requires the use of the other: cameras and films. These goods are also called complementary goods. When two goods are in joint demand, an increase in the price of one good will reduce the demand for the other good.

If goods are in joint supply², the production of one of the goods automatically creates a supply of the other good. For example, it is not possible to produce mutton³ without producing sheepskins, and beef⁴ cannot be produced without creating a supply of hides⁵.

Problems arise when the demand for one of the goods in joint supply increases. For example, lead ⁶ and zinc⁷ are found in the same ore⁸. An increased demand for lead will cause more of it to be produced, and more zinc is also being produced, even though the demand for zinc has not changed. The increased supply of zinc will cause its price to fall.

Another interesting example of joint supply occurs in the transport industry. It means that on many return journeys⁹ vehicles are running empty. A petrol¹⁰ tanker will almost certainly return empty to the oil refinery¹¹. ‘Empty running’¹² raises the costs of transporting goods and people, because the transport charges¹³ must cover the costs of any return journey which does not have a paying load.

1joint demand – суміщений попит 2joint supply – суміщене пропонування 3mutton – баранина 4beef – яловичина 5hide – шкіра 6lead – свинець 7zinc – цинк

8ore – руда 9return journey – зворотний рейс 10petrol – бензин 11oil refinery – нафтоочисний завод 12еmpty running – порожній пробіг 13charges – витрати

Exercise 53 Skim the text above and:

a) explain what is …

joint demand, joint supply, return journey, oil refinery, empty running.

b) say whether these statements are true or false:

1. Goods are in joint demand when the use of one good does not require the use of the other. 2. Complementary goods are goods in joint demand. 3. If goods are in joint supply, the production of one of the goods automatically creates a supply of the other good. 4. Problems don’t usually arise when the demand for one of the goods in joint supply increases. 5. ‘Empty running’ reduces the costs of transporting goods and people. 6. The transport charges must cover the costs of any return journey which does not have a paying load.

Exercise 54 Project. Make your own research of Ukrainian market for mobile phones of the latest models. Which are in the greatest demand? Does the supply meet the demand? What will the price of the good depend on?

Supplementary textB