FRANK HOPKINS ONLY!!! Physical Science Revise for previous writter

Applications of the Scientific Method

The scientific method of problem solving and decision making has the following steps: Statement of the problem, form of hypothesis, test of hypothesis, collect the data, analyse the data and finally draw conclusion (Anderson, 1983). The method comes out to be of great use in tackling this assignment.

Statement of the problem

Establishing a price for a new product using the law of supply and demand

For any seller in the market to succeed and be competitive in the market, they must supply what the consumers want. Supply and demand are broader terms discussed in the sector of business every now and then. Supply refers to the amount of goods and services produced and supplied to the market while demand is the amount of the goods and services supplied to the market bought by the consumers (Henderson, 1922). This law helps us to understand how demand and supply affect the price at which every product is sold at. When demand is high, price tends to be high in order for the producers to get more profit of which in turn changes with time. As time goes by, the consumers are chased away by from the market due to high prices. On the other hand, when demand of a certain product goes low, the supplies tend to lower the price with an aim to win back the customers.

Form of hypothesis

At this juncture I decide to do a research of which will help me get the appropriate solution. The research will concentrate more on sale of mobile phones and how price is altered to maintain and also increase sales. The research will clearly show the relationship that exist between the price of hand set to be sold and the number of units that are sold (Kothari, 2004).

Test of hypothesis

A good example is of a certain mobile phone manufacturing company located in north California. The company usually engages itself in market research to determine the number of mobile phones they should produce. Last year around April, it produced three thousand units which were to be sold at $300 each. The products were highly demanded but within a short while the sales went down. At around July, the mobile phones that had been sold were almost half of the manufactured number. Consumers had the desire to buy the product but the price was somehow uncomfortable and unhandled of. So the company had no any other alternative than to lower the price to $200. Consumers now started purchasing the gadgets at a high number as the company recorded the highest sales ever. This was a clear indication that there exist a special relationship between the demand and price of a product (Gale, 1955).

Collect the data

The following is how I presented my information gotten from the research I made:

A supply and demand curve showing different prices and the quantity supplied and demanded.

A table that clearly illustrates the sales that were made during different times of the year at different prices.

Analyse the data

In reference to the graph, it clearly shows that at P1 the quantity of mobile phones demanded is Q1 while at P2 the quantity of mobile phones demanded is Q2. The moment the price of phones was lowered to $200, the number of phones demanded now increased in between the month of July and December. This was an indication that many customers desired to get the phone at a lower price than before. From this graph we can learn that when the price of a product reduces the demand increases and when the price is higher than the customer’s affordability, the demand goes low.

Also from the table, we can clearly see the number of mobile phones demanded at $300 is much lower than the number demanded when the price is at $200.

Draw conclusion

In conclusion, I can say that the hypothesis is true as from the research done, the law of demand and supply determines the price at which a commodity will be set. From the statistics drawn out, the company now was able to set the price at which they will be selling their mobile phones. The price which emerged to be favourable to both the company and the consumers was at $200.

References

Anderson, P. F. (1983). Marketing, scientific progress, and scientific method. The Journal of Marketing, 18-31.

Gale, D. (1955). The law of supply and demand. Mathematical scandinavica, 155-169.

Henderson, H. D. (1922). Supply and demand (Vol. 1). London: Nisbet & Company Limited.

Kothari, C. R. (2004). Research methodology: Methods and techniques. New Age International.