Question

Dell Computer Corp., the world's largest personal-computer maker, is keenly aware of everything its rival PC manaufacturers decide to go. Explain why Dell usually reacts more quickly and more substantially to pricing, product design, and advertising decisions made by Hewlett-Packard and Gateway than when these same types of decisions are made by Apple Computer.

Answer 1

Dell runs on Microsoft Windows, as does HP and Gateway. Apple does not. Think about the cross-price elasticity of demand for Dell with respect to 1) change in prices of HP products and 2) of Apple products. In additon to price, think about the non-price changes by Dell's competitors.

Lotsa luck

Answer 2

Thanks Lotsa, it helped